Technical Report Summary of the material Tailings Storage Facilities

i

Technical Report Summary

of the Material

Tailings Storage Facilities

Effective Date: 30 June 2022

Qualified Persons:

Mpfariseni Mudau Pr.Sci.Nat.

Steven Rupprecht FSAIMM

Prepared for:

Technical Report Summary of the material Tailings Storage Facilities

ii

Date and Signature Page

This report entitled ‘Technical Report Summary of the Material Tailings Storage Facilities’, with an effective

date of 30 June 2022 was prepared for Ergo Mining Proprietary Limited by the Qualified Persons:

Mr Mpfariseni Mudau and Professor Steven Rupprecht .

Dated at Johannesburg, 28 October 2022.

/s/ Mpfariseni Mudau

Mpfariseni Mudau (Pr.Sci.Nat.)

Resource Geology Manager

The RVN Group

/s/ Steven Rupprecht

Steven Rupprecht (FSAIMM)

Associate Principal Mining Engineer

The RVN Group

Technical Report Summary of the material Tailings Storage Facilities

iii

1

EXECUTIVE SUMMARY 1

1.1

I

NTRODUCTION

 1

1.2

P

ROPERTY

D

ESCRIPTION

 1

1.3

M

INERAL

R

IGHTS AND

O

WNERSHIP

 1

1.4

G

EOLOGY AND

M

INERALIZATION

 2

1.5

E

VALUATION

D

RILLING AND

S

AMPLING

 2

1.6

S

AMPLE

P

REPARATION

 3

1.7

A

SSAYS

 3

1.8

Q

UALITY

A

SSURANCE AND

Q

UALITY

C

ONTROL

 4

1.9

M

ETALLURGICAL

S

AMPLING AND

T

ESTING

 4

1.10

M

INERAL

R

ESOURCE

E

STIMATE

 5

1.11

M

INERAL

R

ESERVE

E

STIMATE

 6

1.12

P

ERMITTING

R

EQUIREMENTS

 9

1.13

C

ONCLUSION AND

R

ECOMMENDATIONS

 9

2

INTRODUCTION 11

2.1

P

ROJECT

B

ACKGROUND

 11

2.2

T

ERMS OF

R

EFERENCE AND

P

URPOSE OF THE

T

ECHNICAL

R

EPORT

 12

2.3

P

ARTICIPANTS AND

A

REAS OF

R

ESPONSIBILITIES

 12

2.4

S

OURCES OF

I

NFORMATION

 13

2.5

S

ITE

I

NSPECTION

 13

2.6

U

NITS

,

C

URRENCIES AND

S

URVEY

C

OORDINATE

S

YSTEM

 14

2.7

I

NDEPENDENCE

 16

3

PROPERTY DESCRIPTION 17

3.1

L

OCATION AND

O

PERATIONS

O

VERVIEW

 17

3.2

M

INERAL

R

IGHTS

C

ONDITIONS

 21

3.3

M

INERAL

T

ITLE

 21

3.4

V

IOLATION AND

F

INES

 23

3.5

R

OYALTIES

 23

3.6

L

EGAL

P

ROCEEDINGS AND

S

IGNIFICANT

E

NCUMBRANCES TO THE

P

ROPERTY

 23

4

ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY 24

4.1

T

OPOGRAPHY

,

E

LEVATION AND

V

EGETATION

 24

4.2

A

CCESS

,

T

OWNS AND

R

EGIONAL

I

NFRASTRUCTURE

 24

4.3

C

LIMATE

 25

4.4

I

NFRASTRUCTURE AND

B

ULK

S

ERVICE

S

UPPLIES

 25

4.5

P

ERSONNEL

S

OURCES

 25

5

HISTORY 26

5.1

O

WNERSHIP

 26

5.1.1

Crown Complex 26

5.1.2

City Deep complex 26

5.1.3

Knight Complex 26

Technical Report Summary of the material Tailings Storage Facilities

iv

5.1.4

Ergo Complex 26

5.1.5

Marievale Complex 26

5.1.6

Grootvlei Complex 27

5.1.7

5A10/5L27 27

5.1.8

Daggafontein TSF 27

5.2

C

ONSTRUCTION OF THE

TSF

S AND

S

AND

D

UMPS

 27

5.3

P

REVIOUS

E

XPLORATION AND

M

INE

D

EVELOPMENT

 28

5.3.1

Previous Evaluation Drilling 28

5.3.2

Previous Development 28

6

GEOLOGICAL SETTING, MINERALIZATION AND DEPOSIT 30

6.1

R

EGIONAL

G

EOLOGY

 30

6.2

M

INERALIZATION

,

L

OCAL AND

P

ROPERTY

G

EOLOGY

 30

6.3

S

TRATIGRAPHY AND

C

ROSS

-

SECTIONS

 31

6.4

D

EPOSIT

T

YPE

 33

7

EXPLORATION 34

7.1

E

XPLORATION

 34

7.2

T

OPOGRAPHIC

S

URVEYS

 34

7.3

E

VALUATION

D

RILLING

 34

7.4

D

RILLING

M

ETHODOLOGY

 34

7.4.1

Auger Drilling 36

7.4.2

Reverse Circulation 36

7.5

C

ROWN

 37

7.6

C

ITY

D

EEP

 38

7.7

K

NIGHTS

 39

7.7.1

4L14 39

7.7.2

4L50 40

7.8

E

RGO

 41

7.8.1

7L15 41

7.8.2

Rooikraal 42

7.9

M

ARIEVALE

 43

7.10

G

ROOTVLEI

C

OMPLEX

 44

7.11

5A10/5L27 47

7.12

D

AGGAFONTEIN

TSF 48

7.13

L

OGGING AND

S

AMPLING

 48

7.13.1

Logging 49

7.13.2

Sampling 49

7.14

S

AMPLE

R

ECOVERY

 49

7.15

O

N

-

SITE

S

ECURITY

M

EASURES

 49

7.16

C

OLLAR

S

URVEY

D

ATA

 49

7.17

D

ENSITY

D

ETERMINATION

 50

7.18

H

YDROLOGICAL

D

RILLING AND

T

EST

W

ORK

 52

7.18.1

Crown Complex 52

7.18.2

City Deep Complex 53

7.18.3

Knights Complex 53

Technical Report Summary of the material Tailings Storage Facilities

v

7.18.4

Ergo Complex 54

7.18.5

Marievale Complex 54

7.18.6

Grootvlei Complex 55

7.18.7

5A10/5L27 56

7.18.8

Daggafontein TSF 56

7.19

G

EOTECHNICAL

D

ATA

,

T

ESTING AND

A

NALYSIS

 57

8

SAMPLE PREPARATION, ANALYSES AND SECURITY 58

8.1

S

AMPLING

G

OVERNANCE AND

Q

UALITY

A

SSURANCE

 58

8.2

S

AMPLE

P

REPARATION AND

A

NALYSIS

 58

8.2.1

On-site Sample Preparation 58

8.2.2

Laboratories, Sample Preparation and Analyses 59

8.2.3

QP Opinion 61

8.3

A

NALYTICAL

Q

UALITY

C

ONTROL

 61

8.3.1

Nature and Extent of the Quality Control Procedures 61

8.3.2

Quality Control Results 62

8.3.3

QP Opinion 62

8.4

S

AMPLE

S

TORAGE AND

S

ECURITY

 62

8.5

D

ATA

S

TORAGE AND

D

ATABASE

M

ANAGEMENT

 62

9

DATA VERIFICATION 64

10

MINERAL PROCESSING AND METALLURGICAL TESTIN G 65

10.1

N

ATURE AND

E

XTENT OF THE

M

ETALLURGICAL

T

ESTING

M

ETHOD

 65

10.2

P

ROCEDURE

 65

10.2.1

Slime Material 65

10.2.2

Sand Material 65

10.3

R

EPRESENTATIVE OF THE

S

AMPLES

 66

10.4

D

ETAILS OF THE

L

ABORATORIES

 66

10.5

R

ESULTS

 66

10.6

I

NTERPRETATION OF THE

R

ESULTS

 67

10.7

QP

O

PINION

 68

11

MINERAL RESOURCE ESTIMATES 69

11.1

V

OLUME

M

ODELLING

 70

11.2

B

ULK

D

RY

D

ENSITY

 70

11.3

E

XPLORATORY

D

ATA

A

NALYSIS

 70

11.4

E

STIMATION

T

ECHNIQUES

 70

11.5

M

ODELLING AND

E

STIMATION

P

ARAMETERS

 71

11.6

M

ODEL

V

ALIDATION

 71

11.7

T

ECHNICAL AND

F

INANCIAL

P

ARAMETERS

 72

11.8

U

NCERTAINTIES AND

C

LASSIFICATION

C

RITERIA

 74

11.9

C

ROWN

C

OMPLEX

 74

11.9.1

Exploratory Data Analysis 74

11.9.2

Modelling and Estimation Parameters 79

11.9.3

Technical and Economic Factors 80

11.9.4

Mineral Resource Classification Criteria 81

Technical Report Summary of the material Tailings Storage Facilities

vi

11.9.5

Mineral Resource Statement 82

11.9.6

Mineral Resource Changes 82

11.9.7

Mineral Resource Risks and Uncertainty 82

11.10

C

ITY

D

EEP

C

OMPLEX

 83

11.10.1

Exploratory Data Analysis 83

11.10.2

Modelling and Estimation Parameters 86

11.10.3

Technical and Economic Factors 87

11.10.4

Mineral Resource Classification Criteria 87

11.10.5

Mineral Resource Statement 87

11.10.6

Mineral Resource Changes 88

11.10.7

Mineral Resource Risks and Uncertainty 88

11.11

K

NIGHTS

C

OMPLEX

 89

11.11.1

Exploratory Data Analysis 89

11.11.2

Modelling and Estimation Parameters 96

11.11.3

Technical and Economic Factors 98

11.11.4

Mineral Resource Classification Criteria 98

11.11.5

Mineral Resource Statement 99

11.11.6

Mineral Resource Changes 100

11.11.7

Mineral Resource Risks and Uncertainty 100

11.12

E

RGO

C

OMPLEX

 100

11.12.1

Exploratory Data Analysis 100

11.12.2

Modelling and Estimation Parameters 108

11.12.3

Technical and Economic Factors 108

11.12.4

Mineral Resource Classification Criteria 109

11.12.5

Mineral Resource Statement 110

11.12.6

Mineral Resource Changes 110

11.12.7

Mineral Resource Risks and Uncertainty 111

11.13

M

ARIEVALE

C

OMPLEX

 111

11.13.1

Exploratory Data Analysis 111

11.13.2

Modelling and Estimation Parameters 116

11.13.3

Technical and Economic Factors 116

11.13.4

Mineral Resource Classification Criteria 116

11.13.5

Mineral Resource Statement 117

11.13.6

Mineral Resource Changes 118

11.13.7

Mineral Resource Risks and Uncertainty 118

11.14

G

ROOTVLEI

C

OMPLEX

 119

11.14.1

Exploratory Data Analysis 119

11.14.2

Modelling and Estimation Parameters 123

11.14.3

Technical and Economic Factors 123

11.14.4

Mineral Resource Classification Criteria 124

11.14.5

Mineral Resource Statement 125

11.14.6

Mineral Resource Changes 126

11.14.7

Mineral Resource Risks and Uncertainty 126

11.15

5A10/5L27

S

AND

D

UMPS

 126

11.15.1

Exploratory Data Analysis 126

Technical Report Summary of the material Tailings Storage Facilities

vii

11.15.2

Modelling and Estimation Parameters 128

11.15.3

Technical and Economic Factors 128

11.15.4

Mineral Resource Classification Criteria 128

11.15.5

Mineral Resource Statement 130

11.15.6

Mineral Resource Changes 130

11.15.7

Mineral Resource Risks and Uncertainty 131

11.16

D

AGGAFONTEIN

TSF 131

11.16.1

Exploratory Data Analysis 131

11.16.2

Modelling and Estimation Parameters 132

11.16.3

Technical and Economic Factors 133

11.16.4

Mineral Resource Classification Criteria 133

11.16.5

Mineral Resource Statement 134

11.16.6

Mineral Resource Changes 135

11.16.7

Mineral Resource Risks and Uncertainty 135

11.17

S

UMMARY

M

INERAL

R

ESOURCE

E

STIMATES

 136

11.18

QP’

S

O

PINION

 139

12

MINERAL RESERVE ESTIMATES 140

12.1

G

RADE

C

ONTROL AND

R

ECONCILIATION

 140

12.2

C

UT

-

OFF

G

RADE

E

STIMATION

 141

12.3

E

STIMATION AND

M

ODELLING

T

ECHNIQUES

 142

12.4

M

INERAL

R

ESERVE

C

LASSIFICATION

C

RITERIA

 142

12.5

M

INERAL

R

ESERVES

S

TATEMENT

 142

12.6

QP

S

TATEMENT ON THE

M

INERAL

R

ESERVE

E

STIMATION

 144

13

MINING METHODS 145

13.1

M

INING

M

ETHOD

 145

13.1.1

Hydraulic Mining 146

13.1.2

Conventional Load, Haul and Slurry 149

13.2

M

INING

S

ECTIONS

 152

13.2.1

West Rand 155

13.2.2

Central Rand Section – City Section 155

13.2.3

East Rand Section 156

13.3

M

INE

D

ESIGN AND

S

CHEDULE

 157

13.4

G

EOTECHNICAL AND

G

EOHYDROLOGY

 160

13.5

R

EQUIREMENTS FOR

S

TRIPPING

 161

13.6

M

INING

E

QUIPMENT AND

P

ERSONNEL

R

EQUIREMENTS

 162

13.7

M

INE

P

LANS

 162

13.7.1

Introduction 162

13.7.2

Central Rand 162

13.7.3

East Rand (Ergo) 162

14

PROCESSING AND RECOVERY METHODS 165

14.1

I

NTRODUCTION

 165

14.2

P

LANT

F

EED

G

RADE AND

M

ETALLURGICAL

T

EST

W

ORK

 165

14.3

M

INERAL

P

ROCESS AND

E

QUIPMENT

C

HARACTERISTICS

 168

Technical Report Summary of the material Tailings Storage Facilities

viii

14.3.1

Reception 168

14.3.2

De-sanding Section 168

14.3.3

Carbon-in-Leach 168

14.3.4

Carbon Treatment 168

14.3.5

Plant Services 169

14.4

P

ERSONNEL

R

EQUIREMENTS

 169

14.5

E

NERGY AND

W

ATER

R

EQUIREMENTS

 169

14.6

P

ROCESS

M

ATERIALS

R

EQUIREMENTS

 169

15

INFRASTRUCTURE 170

15.1

R

OADS

 170

15.2

S

ITE

O

FFICES AND

W

ORKSHOPS

 170

15.3

P

OWER

 170

15.4

P

UMPS AND

P

IPELINES

 171

15.5

W

ATER

 172

15.6

I

NFRASTRUCTURE

 172

15.7

T

AILINGS

D

ISPOSAL

 174

15.8

C

ONCLUSION

 176

16

MARKET STUDIES 177

16.1

M

ARKETS

 177

16.2

G

OLD

P

RICE

 177

16.3

E

XCHANGE

R

ATE

T

RENDS

 178

16.4

G

LOBAL

D

EMAND

 179

16.5

G

LOBAL

S

UPPLY

 180

16.6

C

ONCLUDING

C

OMMENTS

 181

17

ENVIRONMENTAL STUDIES 182

17.1

R

ESULTS OF

E

NVIRONMENTAL

S

TUDIES

 182

17.2

R

EQUIREMENTS FOR

T

AILINGS

D

ISPOSAL

,

S

ITE

M

ONITORING AND

W

ATER

M

ANAGEMENT

 182

17.2.1

Site Monitoring 183

17.2.2

Water Management 183

17.2.3

Vegetation Monitoring 183

17.2.4

Vegetation Maintenance 183

17.2.5

Water Monitoring 183

17.2.6

Legal and Permitting 184

17.3

P

LAN

N

EGOTIATIONS

,

 OR

A

GREEMENTS WITH

L

OCAL

I

NDIVIDUALS OR

G

ROUPS

 184

17.4

M

INE

C

LOSURE

P

LANS

R

EMEDIATION

P

LANS

,

 AND

A

SSOCIATED

C

OSTS

 185

17.5

QP

S

TATEMENT ON THE

E

NVIRONMENTAL

S

TUDIES

,

P

ERMITTING

,

P

LANS

,

N

EGOTIATIONS

,

 WITH

L

OCAL

I

NDIVIDUALS OR

G

ROUPS

 186

18

CAPITAL AND OPERATION COSTS 187

18.1

C

APITAL

E

XPENDITURE

 187

18.1.1

Ergo Section Capital Expenditure 187

18.1.2

City Capital Expenditure 190

18.1.3

Knights Capital Expenditure 190

Technical Report Summary of the material Tailings Storage Facilities

ix

18.1.4

QP commentary 190

18.2

O

PERATING

C

OSTS

 191

19

ECONOMIC ANALYSIS 192

19.1

E

CONOMIC

A

NALYSIS

 192

19.2

S

ENSITIVITY

A

NALYSIS

 195

19.3

R

ISK

A

SSESSMENT

 195

19.3.1

Rising Electricity Prices and Eskom Supply Distribution 195

19.3.2

Tailings Storage Facility Capacity 196

19.3.3

Social Unrest 196

19.3.4

Increased Crime 196

19.3.5

Depletion of Ergo’s Mineral Reserves 197

19.3.6

Social Licenses to Operate 197

19.3.7

Fluctuations in the Gold Price and Exchange Rate 197

19.3.8

Supply and Cost of Water 198

20

ADJACENT PROPERTIES 199

21

OTHER RELEVANT DATA AND INFORMATION 199

22

INTERPRETATION AND CONCLUSIONS 200

23

RECOMMENDATIONS 200

24

REFERENCES 201

25

RELIANCE ON INFORMATION PROVIDED BY REGISTRANT 201

26

QUALIFIED PERSONS DISCLOSURE CONSENT 202

Technical Report Summary of the material Tailings Storage Facilities

x

Figure 3.1: Location of the Material TSFs and Infrastructure (the material properties of

Ergo) ................................ ................................ ................................ ............................ 19

Figure 3.2: Location of the Material Properties in Relation to the Smaller TSFs and Clean-

up Operations ................................ ................................ ................................ ............ 20

Figure 6.1: A Typical Stratigraphy for Ergo’s TSFs ................................ ................................ .. 32

Figure 6.2: Grootvlei Complex (6L17) Map showing Location of Cross-section ...................... 32

Figure 6.3: Cross-section of the Grootvlei Complex (6L17) ................................ ....................... 33

Figure 7.1: Crown Complex: Map showing drill hole Locations ................................ .......... 37

Figure 7.2: City Deep Complex: Map showing Drill Hole Locations ................................ ........ 38

Figure 7.3: Knights Complex - 4L14: Map showing Drill Hole Locations ................................ .... 39

Figure 7.4: Knights Complex - 4L50: Map showing Drill Hole Locations ................................ .... 40

Figure 7.5: Ergo Complex - 7L15: Map showing Drill Hole Locations ................................ ........ 41

Figure 7.6: Ergo Complex - Rooikraal: Map showing Drill Hole Locations ................................ 42

Figure 7.7: Marievale Complex: Map showing Drill Hole Locations ................................ ......... 43

Figure 7.8: Grootvlei Complex - 6L16: Map showing Drill Hole Locations ................................ 44

Figure 7.9: Grootvlei Complex - 6L17: Map showing Drill Hole Locations ................................ 45

Figure 7.10: Grootvlei Complex - 6L17A: Map showing Drill Hole Locations ........................... 46

Figure 7.11: 5A10/5L27: Map showing Drill Hole Locations ................................ ................. 47

Figure 7.12: Daggafontein Complex - Daggafontein TSF: Map showing Drill Hole

Locations ................................................................ ................................ .................... 48

Figure 8.1: Cone and Quartering Method ................................ ................................ ................. 58

Figure 11.1: 3L7 (Mooifontein): Distribution of Raw Gold Capped Data .......................... 75

Figure 11.2: 3L7 (Mooifontein): Distribution of Composited Gold Data ............................ 76

Figure 11.3: 3L8 (GMTS): Distribution of Raw Gold Capped Data ................................ ..... 76

Figure 11.4: 3L8 (GMTS): Distribution of Composited Gold Data ................................ ....... 77

Figure 11.5: 3L5 (Diepkloof: Diepkloof): Distribution of Raw Gold Capped Data ............ 77

Figure 11.6: 3L5 (Diepkloof: Diepkloof): Distribution of Composited Gold Data ............... 78

Figure 11.7: 3L5 (Diepkloof: Homestead): Distribution of Raw Gold Capped Data ......... 78

Figure 11.8: 3L5 (Diepkloof: Homestead): Distribution of Composited Gold Data ........... 79

Figure 11.9: 4L3: Distribution of Raw Gold Capped Data ................................ .................. 83

Figure 11.10: 4L3: Distribution of Composited Gold Data................................ ..................... 84

Figure 11.11: 4L4: Distribution of Raw Gold Capped Data ................................ .................. 84

Figure 11.12: 4L4: Distribution of Composited Gold Data................................ ..................... 85

Figure 11.13: 4L6:

Distribution of Raw Gold Capped Data

 ................................ ......................... 85

Technical Report Summary of the material Tailings Storage Facilities

xi

Figure 11.14: 4L6: Distribution of Composited Gold Data................................ ..................... 86

Figure 11.15: 4L14: Distribution of Slime Raw Data ................................ ................................ 89

Figure 11.16: 4L14: Log Distribution of Slime Raw Data ................................ ......................... 90

Figure 11.17: 4L14: Distribution of Slime 6m Composited Data ................................ ............ 90

Figure 11.18: 4L14: Log Distribution of Slime 6m Composited Data ................................ ..... 91

Figure 11.19: 4L14: Distribution of Soil Raw Data ................................ ................................ ... 91

Figure 11.20: 4L14: Log Distribution of Soil Raw Data ................................ ............................ 92

Figure 11.21: 4L14: Distribution of Soil Raw Capped Data................................ .................... 92

Figure 11.22: 4L14: Log Distribution of Soil Raw Capped Data ................................ ............ 93

Figure 11.23: 4L50: Log Distribution of Raw Slime Data ................................ ......................... 93

Figure 11.24: 4L50: Distribution of Raw Slime Raw Data ................................ ........................ 94

Figure 11.25: 4L50: Log Distribution of Raw Capped Slime Data ................................ ......... 94

Figure 11.26: 4L50: Distribution of Raw Capped Slime Data ................................ ................ 95

Figure 11.27: 4L50: Distribution of 3m Composited Slime Data ................................ ............ 95

Figure 11.28: 4L50: Log Distribution of 3m Composited Slime Data ................................ ..... 96

Figure 11.29: 4L50: Head Grade versus Modelled Average Gold Grade ........................... 99

Figure 11.30: Rooikraal: Distribution of Raw Gold Data ................................ ...................... 101

Figure 11.31: Rooikraal: Log Distribution of Composited Gold Data ................................ . 102

Figure 11.32: 7L15: Plan showing North and South Domains ................................ .............. 103

Figure 11.33: 7L15: Distribution of 2015 Raw Data - North Domain ................................ .... 104

Figure 11.34: 7L15: Log Distribution of 2016 Raw Data - North Domain ............................. 104

Figure 11.35: 7L15: Distribution of 2015 Raw Data - South Domain ................................ .... 105

Figure 11.36: 7L15: Log Distribution of 2016 Raw Data - South Domain............................. 105

Figure 11.37: 7L15: Distribution of 3m Composited Slime Data - South Domain ............... 106

Figure 11.38: 7L15: Log Distribution of 3m Composited Slime Data - South Domain ........ 106

Figure 11.39: 7L15: Distribution of 3m Composited Slime Data - North Domain ............... 107

Figure 11.40: 7L15: Log Distribution of 3m Composited Slime Data - North Domain ........ 107

Figure 11.41: 7L4: Distribution of Capped Raw Gold Data ................................ ............... 112

Figure 11.42: Distribution of Composited Raw Gold Data ................................ ................. 112

Figure 11.43: 7L5: Distribution of Raw Gold Data ................................ ................................ 113

Figure 11.44: 7L5: Distribution of Composited Gold Data................................ ................... 113

Figure 11.45: 7L6: Distribution of Raw Gold Data ................................ ................................ 114

Figure 11.46: 7L6: Distribution of Composited Gold Data ................................ ...................... 114

Technical Report Summary of the material Tailings Storage Facilities

xii

Figure 11.47: 7L7: Distribution of Raw Capped Gold Data ................................ ................ 115

Figure 11.48: 7L7: Distribution of Composited Capped Gold Data ................................ ... 115

Figure 11.49: 6L16: Distribution of Raw Capped Gold Data ................................ .............. 120

Figure 11.50: 6L16: Distribution of Composited Gold Data ................................ ................. 120

Figure 11.51: 6L17: Distribution of Raw Capped Gold Data ................................ .............. 121

Figure 11.52: 6L17: Distribution of Composited Gold Data ................................ ................. 121

Figure 11.53: 6L17A: Distribution of Raw Capped Gold Data ................................ ........... 122

Figure 11.54: 6L17A: Distribution of Composited Gold Data ................................ ............. 122

Figure 11.55: 5A10/5l27: Distribution of Raw Gold Data ................................ ..................... 127

Figure 11.56: 5A10/5l27: Distribution of Composited Gold Data ................................ ....... 127

Figure 11.57: Boxplots for the Different Drilling Campaigns ................................ ................ 131

Figure 11.58: Log Probability Plot ................................ ................................ .......................... 132

Figure 11.59: Mineral Resource Classification................................ ................................ ...... 134

Figure 11.60: Mineral Resource Reconciliation (Inclusive) ................................ ................. 139

Figure 13.1: Typical Tailing Storage Facility ................................ ................................ ........ 146

Figure 13.2: Example of Hydraulic Mining ................................ ................................ .......... 147

Figure 13.3: Hydraulic Mining Process Diagram ................................ ................................ 148

Figure 13.4: Typical Mining Method for a TSF ................................ ................................ ..... 149

Figure 13.5: Example of Loading with a FEL ................................ ................................ ....... 150

Figure 13.6: Example of Loading with a FEL into a Hopper ................................ .............. 150

Figure 13.7: Example of Material on Conveyor ................................ ................................ . 151

Figure 13.8: Slurry Point for Loading ................................ ................................ .................... 151

Figure 13.9: Ergo Sections ................................ ................................ ................................ .... 153

Figure 13.10: Ergo Operations Overview ................................ ................................ ............. 154

Figure 13.11: Hydraulic Mining with Monitor showing Distance and Angle ...................... 161

Figure 13.12: Daggafontein TSF Top Cut Mining Sequence ................................ ............... 163

Figure 13.13: Daggafontein TSF Middle Cut Mining Sequence ................................ ......... 163

Figure 13.14: Daggafontein TSF Bottom Cut Mining Sequence ................................ ......... 164

Figure 14.1: Process Flow Diagram ................................ ................................ ..................... 167

Figure 15.1: Above Ground Pipeline System ................................ ................................ ..... 171

Figure 15.2: Rooikraal General Arrangement - Site Layout ................................ .............. 173

Figure 15.3: Brakpan/Withok TSF ................................ ................................ ......................... 175

Figure 15.4: Placement of Tailings Material at Brakpan/Withok TSF ................................ 175

Technical Report Summary of the material Tailings Storage Facilities

xiii

Figure 19.1: Ergo LoM Production Tonnage ................................ ................................ ....... 192

Figure 19.2: Ergo LoM Gold Production ................................ ................................ ............. 193

Figure 19.3: Sensitivity Analysis ................................ ................................ ............................ 195

Figure 19.4: 30-Year Gold Price in USD/oz (1992 to 2022) ................................ ................ 198

Graph 1: Gold Price Historical Trendline ................................ ................................ .................. 178

Graph 2: Exchange Rate Historical Trendline ................................ ................................ ......... 178

Graph 3: Global Gold Demand from 2012 to 2021 ................................ ................................ 179

Graph 4: Global Gold Supply from 2012 to 2021 ................................ ................................ .... 180

Table 1.1: Ergo’s Mineral Resource Statement as at 30 June 2022 (Inclusive) ......................... 5

Table 1.2: Ergo’s Mineral Resource Statement as at 30 June 2022 (Exclusive) ........................ 6

Table 1.3: Ergo’s Mineral Reserve Statement as at 30 June 2022 ................................ ............. 6

Table 1.4: Mineral Reserve Reconciliation ................................ ................................ .................. 7

Table 2.1: List of QPs and their Responsibilities ................................ ................................ .......... 13

Table 2.2: List of Abbreviations ................................ ................................ ................................ ... 14

Table 3.1: Footprint Areas of the Material TSFs................................ ................................ .......... 18

Table 3.2: Mineral Rights Information as at 30 June 2022 ................................ ........................ 22

Table 3.3: Land Tenure Information ................................ ................................ ........................... 22

Table 5.1: History and Status of the TSFs and Sand Dump ................................ ....................... 28

Table 5.2: ERGO Production History ................................ ................................ ........................... 29

Table 6.1: Origin of the TSF and Sand Dump Material ................................ ............................. 31

Table 7.1: Survey Details of the Material from the TSFs and Sand Dumps .............................. 35

Table 7.2: Bulk Density Information and Statistics ................................ ................................ ..... 51

Table 7.3: GMTS (3L8) Moisture Content ................................ ................................ ................... 52

Table 7.4: Diepkloof (3L5) Moisture Content ................................ ................................ ............. 52

Table 7.5: Mooifontein (3L7) Moisture Content ................................ ................................ ......... 52

Table 7.6: 4L3 Moisture Content ................................ ................................ ................................ . 53

Table 7.7: 4L4 Moisture Content ................................ ................................ ................................ . 53

Table 7.8: 4L6 Moisture Content ................................ ................................ ................................ . 53

Table 7.9: 4L14 Moisture Content ................................ ................................ ............................... 53

Technical Report Summary of the material Tailings Storage Facilities

xiv

Table 7.10: 4L50 Moisture Content ................................ ................................ ...................... 54

Table 7.11: Rooikraal Moisture Content ................................ ................................ .............. 54

Table 7.12: 7L15 Moisture Content ................................ ................................ ...................... 54

Table 7.13: 7L4: Moisture Content ................................ ................................ ....................... 54

Table 7.14: 7L5: Moisture Content ................................ ................................ ....................... 55

Table 7.15: 7L6: Moisture Content ................................ ................................ ....................... 55

Table 7.16: 7L7: Moisture Content ................................ ................................ ....................... 55

Table 7.17: 6L16 Moisture Content ................................ ................................ ...................... 55

Table 7.18: 6L17 Moisture Content ................................ ................................ ...................... 56

Table 7.19: 6L17A Moisture Content ................................ ................................ .................... 56

Table 7.20: 5A10/5L27 Moisture Content ................................ ................................ ............ 56

Table 7.21: Daggafontein Moisture Content ................................ ................................ ...... 56

Table 8.1: Laboratories Used ................................ ................................ ................................ ...... 60

Table 10.1: Summary of Predicted Ergo Processing Plant Performance .......................... 67

Table 11.1: Financial and Technical Data considered for Mineral Resource .................. 72

Table 11.2: Mineral Resource Estimate Cut-off Grades ................................ ..................... 73

Table 11.3: Search Parameters: Inverse Distance Estimation Method ................................ 79

Table 11.4: Confidence Levels for Key Criteria for Mineral Resource Classification ....... 81

Table 11.5: Crown Complex Mineral Resource Estimate (Exclusive) ................................ ... 82

Table 11.6: Search Parameters: Inverse Distance Estimation Method ................................ 86

Table 11.7: Confidence Levels of Key Criteria for Classification of the TSFs Mineral

Resources ................................ ................................ ................................ ................... 87

Table 11.8: City Deep Complex Mineral Resource Estimates (Inclusive)............................. 88

Table 11.9: City Deep Complex Mineral Resource Estimates (Exclusive) ............................ 88

Table 11.10: 4L14: Search Parameters: Nearest Neighbor Estimation Method ................. 96

Table 11.11: 4L14: Search Parameters: Inverse Distance Estimation Method .................... 96

Table 11.12: 4L50: Search Parameters: Nearest Neighbor Estimation Method ................. 97

Table 11.13: 4L50: Search Parameters: Inverse Distance Estimation Method .................... 97

Table 11.14: Confidence Levels of Key Criteria for Classification of the 4L14and 4L50

TSFs Mineral Resources ................................ ................................ .............................. 98

Table 11.15: Knights Complex Mineral Resource Estimates (Inclusive) ............................... 99

Table 11.16: Knights Complex Mineral Resource Estimates (Exclusive) ............................ 100

Table 11.17: Rooikraal: Search Parameters: Inverse Distance Estimation Method ......... 108

Table 11.18: 7L15: Search Parameters: Inverse Distance Estimation Method .................. 108

Technical Report Summary of the material Tailings Storage Facilities

xv

Table 11.19: Ergo: Confidence Levels for Key Criteria for Mineral Resource

Classification ................................ ................................ ................................ ............ 109

Table 11.20: Ergo Mineral Resource Estimates (Inclusive)................................ .................. 110

Table 11.21: Ergo Mineral Resource Estimates (Exclusive) ................................ ................. 110

Table 11.22: Search Parameters ................................ ................................ .......................... 116

Table 11.23: Confidence Levels for Key Criteria for Mineral Resource Classification ..... 116

Table 11.24: Marievale Mineral Resource Estimates (Inclusive) ................................ ........ 117

Table 11.25: Marievale Resource Estimates (Exclusive) ................................ ..................... 118

Table 11.26: Search Parameters: Inverse Distance Estimation Method ........................... 123

Table 11.27: Confidence Levels for Key Criteria for Mineral Resource Classification ..... 125

Table 11.28: Grootvlei Complex Mineral Resource Estimates (Exclusive) ........................ 126

Table 11.29:

Search Parameters: Inverse Distance Estimation Method

 ................................ ....... 128

Table 11.30: Confidence Levels for Key Criteria for Mineral Resource Classification ..... 129

Table 11.31: 5A10/5L27 Mineral Resource Estimates (Inclusive) ................................ ........ 130

Table 11.32: 5A10/5L27 Mineral Resource Estimates (Exclusive) ................................ ....... 130

Table 11.33: Search Parameters ................................ ................................ .......................... 133

Table 11.34:

Confidence Levels for Key Criteria for Mineral Resource Classification

 ................... 133

Table 11.35: Daggafontein TSF Mineral Resource Estimate (Inclusive) ............................ 134

Table 11.36: Daggafontein TSF Mineral Resource Estimate (Exclusive) ............................ 135

Table 11.37: Inclusive Mineral Resources of the 19 Material Properties as at 30 June

2022 136

Table 11.38: Exclusive Mineral Resources of the 19 Material Properties as at 30 June

2022 137

Table 11.39: Ergo Inclusive Mineral Resources Statement as at 30 June 2022 ................ 138

Table 11.40:

Ergo Exclusive Mineral Resources Statement as at 30 June 2022

 ............................ 138

Table 12.1: Reconciliation of RoM Head Grade (Au) ................................ ......................... 140

Table 12.2: Reconciliation of RoM Tonnage ................................ ................................ ..... 140

Table 12.3: Cut-off Grade and Mineral Reserve Grades ................................ ................. 141

Table 12.4: Ergo TSF Mineral Reserves Statement as at 30 June 2022 ............................ 143

Table 12.5: Mineral Reserve Reconciliation ................................ ................................ ...... 143

Table 13.1: Historical Ergo Operational Results ................................ ................................ . 145

Table 13.2: Central Rand (City Section) ................................ ................................ ............ 155

Table 13.3: Central Rand (Knights Section) ................................ ................................ ...... 156

Table 13.4: East Rand Section (Ergo Section) ................................ ................................ ... 157

Technical Report Summary of the material Tailings Storage Facilities

xvi

Table 13.5: Summary of Modifying Factors for LoM Plan ................................ ................. 158

Table 13.6: Ergo Forecast Production from July 2021 to June 2034 ................................ 159

Table 14.1: Ergo Process Recoveries ................................ ................................ .................... 168

Table 16.1: Above Ground Gold Stocks in 2021 ................................ ............................... 177

Table 16.2: Long Term Consensus Forecasts in Nominal Terms ................................ ....... 179

Table 16.3: Global Gold Production ................................ ................................ ................. 180

Table 17.1: Ergo Water Consumption ................................ ................................ ............... 183

Table 17.2: SLP Financial Provision Summary ................................ ................................ .... 185

Table 17.3: Ergo Rehabilitation Financial Provision Summary ................................ ......... 186

Table 18.1: Capital Expenditure Summary ................................ ................................ ....... 187

Table 18.2: Rooikraal Capital Expenditure Estimate ................................ ........................ 187

Table 18.3: Marievale Capital Pump Stations ................................ ................................ .. 188

Table 18.4: Marievale Total Capital Expenditure Summary ................................ ............ 188

Table 18.5: Daggafontein Capital Pump Stations ................................ ........................... 188

Table 18.6: Daggafontein Capital Expenditure Summary ................................ .............. 189

Table 18.7: Non-material TSF Capital Expenditure for the Ergo Section ......................... 189

Table 18.8: Withok Compartment Capital Expenditure ................................ .................. 189

Table 18.9: Solar Power Project Capital Estimate ................................ ............................ 190

Table 18.10: City Total Capital Expenditure Summary ................................ ....................... 190

Table 18.11: Average LoM Operating Cost for Ergo ................................ .......................... 191

Table 19.1: Economic Analysis ................................ ................................ ........................... 194

Table 26.1: Qualified Person’s Details................................ ................................ ................ 202

Technical Report Summary of the material Tailings Storage Facilities

1

1 Executive Summary

1.1 Introduction

Ergo Mining (Proprietary) Limited (Ergo) is a wholly owned subsidiary of DRDGOLD Limited (DRDGOLD).

DRDGOLD is domiciled in South Africa and listed on the Johannesburg Stock Exchange (JSE: DRD) and

New York Stock Exchange (NYSE: DRD). DRDGOLD, a South African-based gold mining company, has a

100% share in Ergo. DRDGOLD is a Tailings Storage Facilities (TSFs) retreatment company.

The TSFs Mineral Resource and Mineral Reserve estimates declared in this Technical Report Summary

(this Report) are 100% attributable to DRDGOLD. The TSFs covered are from Crown, City Deep, Knights,

Ergo, Marievale and Grootvlei Complexes, 5A10/5L27 sand dump and Daggafontein TSF.

The Mineral Resource and Mineral Reserve estimate contained in this Technical Report Summary were

compiled and reported by the Qualified Persons (QPs) for DRDGOLD in accordance with Items

601(b)(96) and 1300 through 1305 of Regulation S-K (Title 17, Part 229, Items 601(b)(96) and 1300 through

1305 of the Code of Federal Regulations) promulgated by the Securities and Exchange Commission

(SEC).

This document is the first submission of a Technical Report Summary under Regulation S-K; thus, it is not

an update of a previously filed Technical Report Summary.

This Technical Report Summary is based on information available until 30 June 2022. There were no

material changes between the effective and reporting dates.

1.2 Property Description

Ergo is reclaiming TSFs and sand dumps in the City of Johannesburg and the City of Ekurhuleni, Gauteng,

South Africa. The Crown and City Deep Complexes are in the City of Johannesburg, while all other TSFs

are located in the City of Ekurhuleni. A total of 19 material properties are discussed in this report.

1.3 Mineral Rights and Ownership

Ergo’s title in its Mineral Resources is vested in common law ownership and/or contractual arrangements

and Prospecting Rights, and its competency to mine the same lie in various Mining Rights that were

converted (and consolidated) in terms of the provisions of the MPRDA and Environmental Approvals.

Ergo has submitted an application to renew and consolidate all their Mining Rights into a single Mining

Right; this application is receiving attention from the Department of Mineral Resources and Energy

(DMRE). Renewal applications have been submitted to the DMRE for each expired Right. Ergo has

applied to extend the consolidated Mining Right for 30 years, which is the maximum allowable renewal

period as detailed in the Mineral and Petroleum Resources Development Act, 2002 (Act No. 28 of 2002)

(MPRDA).

This report has considered section 24(5) of the MPRDA, as amended:

“

A mining right in respect of which an application for renewal has been lodged shall despite its expiry

date remain in force until such time as such application has been granted or refused.

”

The same applies to the Prospecting Rights through section 18(5) of the MPRDA.

Technical Report Summary of the material Tailings Storage Facilities

2

1.4 Geology and Mineralization

The TSFs are man-made features. The material in the TSFs has been processed through metallurgical

plants that generate residue (tailings), which are relatively uniform in comparison with the natural

deposit from which the material is derived. The variation between grades is small as the process residue

TSFs were constructed in layers. Grade variation primarily follows variations in the processing and, to a

lesser extent, the primary deposits characteristic.

The TSFs are the waste product of the mineral recovery process. They took the form of a liquid slurry

made of fine mineral particles - created when mined ore was crushed, milled and processed. The tailings

were pumped to TSFs which were constructed using the Upstream Deposition Methodology. Water

contained within the slurry was removed via various drainage systems and then re-used in the process

whilst the TSF was in operation. Once a TSF is decommissioned and declared dormant, water is still

drained and recovered but evaporation and seepage are the main reasons for water loss.

Rehabilitation of the side slopes and top surface of the TSF, by way of vegetation and irrigation , was

previously only implemented once the TSF was declare d dormant.

1.5 Evaluation Drilling and Sampling

A qualified surveyor surveyed all evaluation drill hole positions . Holes were drilled into the TSF at 1.5m

intervals to determine grade distribution. The number of samples (at 1,5m intervals), correlated with

surveying data, provided the height of the TSF and tonnage based on a bulk solid’s density of 1.42.

The typical exploration programs (geophysics, trenching, mapping, and soil sampling) were not

undertaken on the TSFs. Evaluation drilling programs were conducted on the TSFs. No exploration is

required to locate TSFs, as their locations are known and established above the natural ground level.

Two drilling techniques were followed by specialized drilling contractors on the TSFs. The Reverse

Circulation (RC) method was used where auger drilling techniques could not drill to the base of the TSFs,

mainly due to the drill hole length and moisture of the TSFs towards their bases.

With auger drilling, the rotation of a helical screw causes the blade of the screw to lift the sample to the

surface. This drilling method does not require heavy machinery to drill to the desired depth. The auger

method can be used for shallow environmental drilling, geotechnical drilling, soil engineering and

mineral deposits where the formation is soft and the hole does not collapse. This is done by pressing the

spiral rods into the ground using a drilling head machine which can drill up to a depth of 50m.

Samples were collected through the spiral at 1.5m intervals, and the spiral was cleaned with water and

brushed after every run.

The RC drilling technique was chosen in preference to auger drilling in certain locations because RC

drilling could drill deeper than auger drilling. In addition, because of its higher power, RC can drill

through wet material and has better recovery percentages than auger drilling, which loses wet samples

through its spiral.

The RVN Group (Proprietary) Limited (The RVN Group) monitored the drilling and sampling process. The

methods were to an acceptable industry standard, and the results were considered appropriate for

further evaluation.

Technical Report Summary of the material Tailings Storage Facilities

3

Logging was carried out as per the Ergo protocols and the QP considered it appropriate for the deposit

under consideration. Drill holes were logged on-site by the RVN Geologist. Samples of 1.5m length

intervals were taken for the entire length of the drill holes. Samples were classified according to whether

they were slimes or soil, moist or wet and on color. All drill hole data was provided to Ergo in electronic

and hardcopy formats as drill hole logs, sample logs and assay certificates.

1.6 Sample Preparation

As the samples were moist to wet, all samples were split on-site using the cone and quartering method.

One set was prepared for routine exploration analysis for use in the Mineral Resource estimation and the

other set for metallurgical process test work. All the samples were presented to the laboratory in a well-

organized and sorted manner with easily understandable documentation, including fully completed

Sample Submission Forms.

The samples were sent to the following three laboratories for further preparation and assaying:

●

MAED Metallurgical Laboratories (Proprietary) Limited (MAED) is located at Ergo’s processing

plant in Brakpan. The facility is not accredited, however is used by Ergo for its grade control and

daily sampling. Although MAED is not owned by Ergo, it is situated in the Ergo processing plant

and was supplied with all routine exploration samples.

●

SGS South Africa (Proprietary) Limited (SGS) is located in Randfontein. SGS is an accredited

facility (T0265) by the South African National Accreditation System (SANAS) for the selected

analytical method. Randomly selected check samples (approximately 10% of total samples per

TSF) from MAED were sent to SGS for confirmation. SGS is independent of Ergo; and

●

AngloGold Ashanti Limited Chemical Laboratory (Anglo Lab), located in Carletonville, analyzed

some check samples for 7L15 TSF in 2016/2017 as a secondary laboratory to MAED. The

laboratory no longer exists and was not SANAS accredited. The laboratory was independent of

Ergo.

The slime material has been previously processed and sample preparation only requires weighing,

drying, screening, splitting and milling before assaying. Screening removes potentially carbonaceous

and other oversized material to represent the material to be processed through the metallurgical plant.

1.7 Assays

The laboratories weighed the samples on receipt before dry screening them to remove foreign material.

The samples were then dried at 105

˚

C, crushed (80% passing 2mm), before being riffle split and

pulverized to 75µm. The samples were then analyzed to determine the gold content by fire assay with

gravimetric finish by MAED and Atomic Absorption Spectroscopy (AAS) finish by SGS. The lower

detection limit for these methods is 0.01g/t with no upper detection limit for the gravimetric method and

a 10g/t upper limit for AAS. The lower limit is relevant to the current project as the TSFs and sand dumps

consist of processed materials and are generally low-grade, with grades slightly higher than 10 to 20

times the detection limit.

The laboratories were instructed to use a 100g aliquot to analyze for gold. Through the experience of

the QPs, it is known that analyzing gold in low-grade slimes, anything less than a 100g aliquot may report

inaccurate results.

Technical Report Summary of the material Tailings Storage Facilities

4

1.8 Quality Assurance and Quality Control

The laboratories used in analyzing the samples have robust internal quality control checks. They routinely

insert reference material (standards and blanks) and create duplicates to internally check the accuracy

and precision of their assaying techniques. A batch is re-assayed if the quality control samples do not

perform as expected. The results of the quality control checks were provided with the sample assays

and were all found to be acceptable by the QP.

The RVN Group inserted certified quality control samples as an additional check for contamination,

precision and accuracy. The RVN Group quality control samples results were satisfactory as they

generally reported values within the expected ranges.

1.9 Metallurgical Sampling and Testing

The TSFs were portioned into logical sections for metallurgical testing, based either on area, shape or

elevation. The selected intervals for compositing into the metallurgical test work samples were taken at

different elevations within the TSF to provide sufficient material for the test work.

The

“

as received

”

 material was blended and divided into 2kg portions using cone and quarter

splitting.

Leaching of

“

as received

”

 material were done using the following parameters, which simulates the

existing Ergo leach plant:

●

pH = 10.5;

●

precondition with lime for 1 hour or more to maintain pH at 10.5;

●

Carbon-in-Leach (CIL) with 15g/l carbon;

●

NaCN addition 0,5kg/t;

●

dissolved oxygen in excess of six parts per million (ppm);

●

leach time eight hours; and

●

all samples were submitted to MAED for gold analysis .

The metallurgical test work confirms that the material tested can be processed to recover residual gold

from the TSFs assessed via the current Ergo metallurgical plant process.

Predicted recoveries from the TSFs tested vary between 30% and 60% and are dependent on head

grade and the nature of the material. These values are typical for gold TSF processing. All the TSFs meet

the requirements for processing through the Ergo plants.

Technical Report Summary of the material Tailings Storage Facilities

5

1.10 Mineral Resource Estimate

The Mineral Resource Estimate for the TSFs and sand dumps were adjusted for depletion as at

30 June 2022. The Mineral Resource estimate for all the TSFs and sand dumps are declared as follows:

●

the point of reference is

in situ

for all TSFs and sand dumps. The TSFs or sand dumps themselves

are the reference points;

●

no geological or other loses were applied as all material is accessible and there are no

geological structures.

●

the Mineral Resource Estimate is stated as both inclusive and exclusive of Mineral Reserves as

defined in Subpart 1300 of Regulation S-K; and

●

Mineral Resource is 100% attributable to DRDGOLD .

The total Mineral Resource Estimate for Ergo is presented in Table 1.1 to Table 1.2. The changes in the

Mineral Resource from June 2021 to June 2022 are due to the depletion of 20.51Mt at 0.33g/t Au and

minor survey adjustments of 2.94Mt at 0.20g/t Au.

Table 1.1: Ergo’s Mineral Resource Statement as at 30 June 2022 (Inclusive)

Mineral Resource

Classification

Mineral Resource as at 30 June 2021

(Inclusive)

Mineral Resource as at 30 June 2022

(Inclusive)

Tons

(Mt)

Au

(g/t)

Contents

(Moz)

Tons

(Mt)

Au

(g/t)

Contents

(Moz)

Measured Mineral Resource

282.95

0.31

2.81

266.25

0.31

2.64

Indicated Mineral Resource

574.95

0.25

4.61

568.21

0.25

4.55

Sub-total Measured and

Indicated Mineral Resource

857.90

0.27

7.42

834.45

0.27

7.19

Inferred Mineral Resource

21.32

0.24

0.16

21.32

0.24

0.16

Total Mineral Resources

879.22

0.27

7.58

855.77

0.27

7.35

Source: The RVN Group, 2022

Notes:

1. Mineral Resources are reported inclusive of Mineral Reserves.

2. Mineral Resources have been reported in accordance with the classification criteria of Subpart 1300 of Regulation S-K.

3. Mineral Resources were estimated using the USD1,823/oz, ZAR15.60/USD, ZAR914,294/kg financial parameters and recoveries in Table 11.2.

4. The reference point for the Mineral Resource is in situ .

5. Quantities and grades have been rounded to two decimal places; therefore, minor computational errors may occur.

6. No geological losses were applied to the Mineral Resources.

7. Attributable Mineral Resource is 100% of the total Mineral Resource.

Technical Report Summary of the material Tailings Storage Facilities

6

Table 1.2: Ergo’s Mineral Resource Statement as at 30 June 2022 (Exclusive)

Mineral Resource

Classification

Mineral Resource as at 30 June 2021

(Exclusive)

Mineral Resource as at 30 June 2022

(Exclusive)

Tons

(Mt)

Au

(g/t)

Contents

(Moz)

Tons

(Mt)

Au

(g/t)

Contents

(Moz)

Measured Mineral Resource

-

-

-

66.04

0.26

0.55

Indicated Mineral Resource

574.95

0.25

4.61

375.41

0.25

3.02

Sub-total Measured and

Indicated Mineral Resource

574.95

0.25

4.61

441.45

0.25

3.57

Inferred Mineral Resource

21.32

0.24

0.16

21.32

0.24

0.16

Total Mineral Resources

596.27

0.25

4.77

462.77

0.25

3.73

Source: The RVN Group, 2022

Notes:

1. Mineral Resources are reported exclusive of Mineral Reserves.

2. Mineral Resources have been reported in accordance with the classification criteria of Subpart 1300 of Regulation S-K.

3. Mineral Resources were estimated using the USD1,823/oz, ZAR15.60/USD, 914,294ZAR/kg financial parameters and recoveries in Table 11.2.

4. The reference point for the Mineral Resource is in situ .

5. Quantities and grades have been rounded to two decimal places; therefore, minor computational errors may occur.

6. No geological losses were applied to the Mineral Resources.

7. Attributable Mineral Resource is 100% of the total Mineral Resource.

1.11 Mineral Reserve Estimate

The total Mineral Reserve estimate for Ergo is presented in Table 1.3. The changes in the Mineral Reserve

from 30 June 2021 to 30 June 2022 is due to the inclusion of 192Mt at 0.24g/t Au from Daggafontein, the

removal of 66Mt at 0.26g/t Au from Grootvlei, the depletion of 20Mt at 0.33g/t Au and the survey

adjustments of 2.94Mt at 0.20g/t Au.

Table 1.3: Ergo’s Mineral Reserve Statement as at 30 June 2022

Mineral Reserve

Classification

Mineral Reserve as at 30 June 2021

Mineral Reserve as at 30 June 2022

Tons

(Mt)

Au

(g/t)

Contents

(Moz)

Tone

(Mt)

Au

(g/t)

Contents

(Moz)

Proven Mineral Reserve

29.36

0.295

0.28

200.21

0.33

2.09

Probable Mineral Reserve

253.59

0.311

2.53

192.79

0.24

1.49

Total Mineral Reserves

282.95

0.309

2.81

393.00

0.28

3.58

Source: The RVN Group, 2022

Notes:

1. Tons and grades were rounded and this may result in minor adding discrepancies.

2. Mineral Reserve has been reported in accordance with the classification criteria defined in the classification criteria of Subpart 1300 of

Regulation S-K

3. Mineral Reserve is estimated using the USD1,823/oz, ZAR15.60/ USD and ZAR914,294/kg financial parameters.

4. A cut-off grade of 0.20g/t has been applied.

5. No mining losses or dilution has been applied in the conversion process nor has a mine call factor been applied. 

6. Tons and grade Run-of-Mine (RoM) as delivered to the plant.

7. Attributable Mineral Reserve is 100% of the total Mineral Reserve.

Technical Report Summary of the material Tailings Storage Facilities

7

Table 1.4 depicts the Mineral Reserve reconciliation between 30 June 2021 and 30 June 2022.

Table 1.4: Mineral Reserve Reconciliation

Source

Tons

(Mt)

Au Grade

(g/t)

Content

(Moz)

Total Mineral Reserve as at 30 June 2021

282.95

0.31

2.81

Depletion through Mining

(20.48)

0.33

(0.22)

Survey Adjustments

(2.94)

0.20

(0.01)

Inclusion of Daggafontein TSF in the LoM Plan

192.79

0.24

1.49

Exclusion of a Grootvlei TSF

(66.04)

0.26

(0.55)

Inclusion of 4 TSFs in the LoM Plan

6.72

0.26

0.06

Total Mineral Reserve as at 30 June 2022

393.00

0.28

3.58

Source: The RVN Group, 2022

Note: Quantities and grades have been rounded to two decimal places therefore minor computational errors may occur.

The various modifying factors, i.e., mining, metallurgical, processing, infrastructure, economic,

marketing, legal, environmental, and governmental factors, are discussed in the following Items of this

report.

The 30 June 2022 Life-of-Mine (LoM) plan was developed for the Ergo operations and is based on the

Mineral Resource Estimate as at 30 June 2022 together with a set of modifying factors based on recent

historical results and economic inputs provided by Ergo. The assumptions applied in determining the

modifying factors and economic inputs are reasonable and appropriate. The LoM plan is sufficient ly

detailed to ensure achievability and is based on historical achievements. All the inputs used in the

estimation of the Mineral Reserve have been thoroughly reviewed and can be considered technically

robust.

The current mining methods applied by Ergo are suitable for all TSFs. No selective mining will occur with

the entire TSF being processed (including Inferred Mineral Resources).

The Ergo processing plant targets a Run-of-Mine (RoM) throughput between 1.8Mtpm to 2.0Mtpm. The

City Deep plant has been reconfigured to operate as a milling and pump station and feed the Ergo

processing plant via a 50km pipeline. The City Deep plant processes material from mining areas of the

Central Rand areas of Johannesburg and is scheduled to close in 2027. Mining areas of Germiston, and

some areas of Boksburg are treated via the Knights plant, with mining operations scheduled to close in

June 2024.

An average processing plant recovery of 40.9% has been estimated over the 19-year LoM. The

recoveries are based on metallurgical test work for the various TSFs, slimes and silted wetland areas that

are scheduled to be mined over the 19-year LoM plan.

The QP is of the opinion that all significant infrastructure and logistical requirements have been

considered and costed. It is notable that Ergo has been operating for more than 20 years and has a

very good understanding of infrastructural and logistical requirements.

A gold price of ZAR914,294/kg is used to support the 30 June 2022 Mineral Resource and Mineral Reserve

statements. A gold price of USD1,823/oz and an exchange rate of ZAR15.60:1USD was used in the

estimation process.

Technical Report Summary of the material Tailings Storage Facilities

8

The gold price and exchange rates were considered reasonable by the QPs to support the Mineral

Resource and Mineral Reserve estimates as at 30 June 2022.

Mining Rights, Environmental Approvals and Prospecting Rights held are listed under the Ergo subsidiary.

Ergo has numerous Surface and Prospecting Rights and the ownership of the surface rights and mine

TSFs vests in various legal entities. Ergo’s Environment al Management Plan (EMP) encompasses all the

activities of Ergo’s operations and assesses the environmental impacts of mining at reclamation sites,

processing plants, TSFs and sand dumps. It also outlines the closure process, including financial

provisions.

There are competing ownership claims on the Grootvlei and Marievale Complexes, as detailed in Item

3.6. On other TSFs, there are no legal challenges to Ergo’s title that would prevent operations of any of

the current mineral rights or mining operations.

A closure cost of ZAR645 million has been estimated in June 2022 for the Ergo operations. The QP is

satisfied that funding for rehabilitation and mine closure is adequate. The QP is satisfied that all material

issues relating to Environmental, Social and Governance have been addressed in this document.

A total capital of ZAR3.22 billion is scheduled to support the 19-LoM plan, as depicted. The breakdown

of capital expenditure indicates that the majority of the capital, ZAR3.14 billion, is allocated to the Ergo

operation over the duration of the LoM plan with an additional ZAR81.9 million allocated for the City

Deep Complex. As the mining at the Knight section is scheduled to be completed in 2024 there is no

allocation of capital. The level of accuracy for the capital expenditure is at least to a preliminary

feasibility study (PFS) level of accuracy, (i.e., +/-25%) with a maximum level of contingency of 15%.

The planned average operating cost for the Ergo budget over the 19-year operations is estimated at a

PFS level of accuracy (i.e., +/-25%) and a total working cost of ZAR90.86/t.

The 30 June 2022 19-year LoM plan, which is the basis of the Mineral Reserve estimate, is scheduled to

mine a total of 410.33Mt at 0.28g/t and produce 50,658kg of gold over the same period. The LoM plan

includes 17.3Mt of material that is treated on a third-party contract basis and is not included in the

Mineral Reserve. The economic analysis is based on a LoM plan that is designed to a PFS level of

accuracy (i.e., +/-25%). The economic analysis conducted by the QP indicates a net present value

(NPV) of ZAR2.21 billion after capital expenditure and taxation utilizing a discount rate of 9.48%. As the

Ergo operations are an on-going operation with an annual positive cashflow, the internal rate of return

(IRR) and payback period are not applicable.

Technical Report Summary of the material Tailings Storage Facilities

9

The sensitivity analysis of the Ergo LoM model varies revenue (price and grade), operating cost and

capital expenditure at 5% increments above and below the base case. The analysis indicates that the

Ergo operations are very sensitive to revenue parameters such as gold price, exchange rate, grade and

recovery. In addition, the LoM is also very sensitive to changes in operating costs. The sensitivity analysis

indicates that the LoM is not overly sensitive to capital and therefore, capital expenditure should be

considered if the expenditure will reduce operating costs or increase revenue. The sensitivity analysis

indicates that the achievement of the LoM Plan in terms of tonnage is critical in realizing the planned

operating costs and being able to mine the individual TSFs at the planned cut-off grade.

1.12 Permitting Requirements

Ergo is one of only a few surface operators that holds Mining Rights under the MPRDA over a large

portion of its reserves. The provisions of the MPRDA, and the definition of ‘mineral’ had inadvertently

created a gap in the Act placing the ‘minerals’ in certain TSFs beyond the regulatory reach of the

MPRDA and limiting its competency to issue rights upon application. 

However, in terms of the transitional arrangements of the MPRDA, which were peremptory upon the

DMRE in the event that the petitioner met the conditions for conversion from ‘old order’ to ‘new order’,

Ergo was able to convert its old order rights, thus extending its “license to mine” into the dispensation

introduced by the MPRDA. Ergo has also submitted applications to renew all its Mining and Prospecting

Rights with the DMRE. The current Mining and Prospecting Rights have expired (with the exception of

7L4 TSF) but remain in force until such time that the renewal applications have been granted or refused

by the DMRE. Water use licenses are applied for as and when required to remain compliant with relevant

legislation.

Ergo complies with all the conditions for renewal and has no reason to believe that the submitted

renewals would not be granted. Ergo is in constant communication with the DMRE and is submitting the

required information as per their requests to finalize these renewal applications.

There are conflicting ownership claims to certain Grootvlei and Marievale TSFs which are detailed in

Item 3.6.

1.13 Conclusion and Recommendations

The QP concludes that the protocols for drilling, sampling preparation and analysis, verification, and

security meet industry standard practices and are appropriate for the purposes of a Mineral Resource

estimate. The studies have found that the Ergo TSFs have reasonable prospects for economic extraction.

The QP is satisfied with the Quality Assurance (QA) developed by The RVN Group and the Quality Control

(QC) programs implemented as there was no significant bias in reporting data.

The QP contends that the assumptions, parameters, and methodology used for the Mineral Resource

estimate are appropriate for the style of mineralization and deposit type.

There is sufficient information to allow for decision-making in the future. The QPs recommended no

additional work.

The QP considers the conversion of Mineral Resources to Mineral Reserves to be appropriate. TSFs

reported in this document have sufficient information to be used in Mineral Reserve estimate and

demonstrate economic viability. The modifying factors applied are considered appropriate as they

Technical Report Summary of the material Tailings Storage Facilities

10

contain sufficient detail to support at least a PFS level of accuracy (i.e., +/-25%); with a maximum level

of contingency of 15%.

The significant risks that could affect the Mineral Resource and Mineral Reserve are:

●

rising electricity prices and the continuity of the Eskom supply distribution;

●

regulatory approval for the Withok compartment of the Brakpan/Withok TSF final life design;

●

the sensitivity of some of the TSFs to the increase in operating costs and the decrease in the gold

price;

●

social unrest and social license to operate;

●

supply and cost of water;

●

failure to obtain necessary approvals from the DMRE;

●

competing claims to ownership of certain Marievale and Grootvlei TSFs;

●

global inflation and rising production costs; and

●

extreme weather.

Technical Report Summary of the material Tailings Storage Facilities

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2 Introduction

2.1 Project Background

Ergo Mining (Proprietary) Limited (Ergo) is a subsidiary of DRDGOLD Limited (DRDGOLD). DRDGOLD is

domiciled in South Africa and listed on the Johannesburg Stock Exchange (JSE:DRD)and New York Stock

Exchange (NYSE: DRD). DRDGOLD, a South African-based gold mining company, has a 100% share in

Ergo. 

The Tailings Storage Facilities ’ (TSFs’) Mineral Resource and Mineral Reserve estimates declared in this

Technical Report Summary (this Report/TRS) are owned by Ergo and are 100% attributable to DRDGOLD.

The TSFs covered in the report are from the Crown, City Deep, Knights, Ergo, Marievale and Grootvlei

Complexes, and 5A10/5L27 sand dumps and Daggafontein TSF. A total of 19 TSFs were identified by Ergo

to be material properties and have been described extensively in this report. Ergo has a total of 98 TSFs

inclusive of 79 smaller TSFs and clean-up sites.

The Mineral Resource and Mineral Reserve estimates contained in this Technical Report Summary were

compiled and reported by the Qualified Persons (QPs) for DRDGOLD in accordance with Items

601(b)(96) and 1300 through 1305 of Regulation S-K (Title 17, Part 229, Items 601(b)(96) and 1300 through

1305 of the Code of Federal Regulations) promulgated by the Securities and Exchange Commission

(SEC).

This document is the first submission of a Technical Report Summary under Subpart 1300 of Regulation S-

K; thus, it is not an update of a previously filed Technical Report Summary.

The material TSFs are at different mining stages as presented below:

●

Crown (3L5, 3L7 and 3L8):

 The TSFs are at an advanced exploration stage, with all TSFs classified

as Indicated Mineral Resources.

●

City Deep (4L3, 4L4 and 4L6):

 The Complex is at a development stage with all TSFs declared as

Measured Mineral Resources and Proven Mineral Reserves.

●

Knights (4L14 and 4L50):

 The Complex is at a development stage, with TSFs reported as Measured

Mineral Resources and Proven Mineral Reserves.

●

Ergo (Rooikraal and 7L15):

 The Complex is at a production stage with Measured/Indicated

Mineral Resources and Proven/Probable Mineral Reserves declared.

●

Marievale (7L4, 7L5, 7L6 and 7L7):

 The Complex is at a development stage with TSFs reported as

Measured Mineral Resources and Proven Mineral Reserves.

●

Grootvlei (6L16, 6L17 and 6L17A):

 The Complex is at an advanced exploration stage with two

TSFs reported as Measured Mineral Resources and one TSF reported as Indicated Mineral

Resources.

●

5A10/5L27 Sand Dumps:

 The two sand dumps are joined. Measured Mineral Resource and

Proven Mineral Reserve were declared. The sand dump is a production stage through trucking

to Ergo Plant.

Technical Report Summary of the material Tailings Storage Facilities

12

●

Daggafontein TSF:

 The TSF is at a development stage, with a significant amount (192.79Mt)

declared as Indicated Mineral Resource and Probable Mineral Reserve. A smaller amount

(21.32Mt) of the material is reported as Inferred Mineral Resource due to inaccessibility because

of the presence of surface water.

2.2 Terms of Reference and Purpose of the Technical Report

Ergo commissioned the QPs from The RVN Group (Proprietary) Limited (The RVN Group) to compile this

Technical Report Summary to report their Mineral Resource and Mineral Reserve estimates.

This report details the results of the evaluation drilling, sampling, assaying, bulk density determination,

surveying and metallurgical test work and the resultant Mineral Resource and Mineral Reserve

estimations.

This document reports the Mineral Resource and Mineral Reserve estimates for the material TSFs. The TSFs

in this report are clustered into complexes, with the exception of the 5A10/5L27 sand dumps and

Daggafontein TSF, which are reported separately due to their size and location:

●

Crown;

●

City Deep;

●

Knights;

●

Ergo;

●

Grootvlei;

●

Marievale;

●

5A10/5L27; and

●

Daggafontein.

This report is the first Technical Report Summary for DRDGOLD prepared under the SEC's Subpart 1300 of

Regulation S-K disclosure requirements.

The effective date of the Mineral Resource and Mineral Reserve estimates for the TSFs is 30 June 2022.

The QPs noted that there had been no material change to the information between the effective date

and the signature date of the Report.

Ergo is a South African gold producer, recovering gold from the retreatment of surface tailings facilities

located in the Central and Eastern areas of the Gauteng Province.

The RVN Group is a South African-based mining consulting firm that provides services and advice to the

local and international mineral industries. Ergo has retained The RVN Group since 2016 to manage

drilling activities, estimate Mineral Resources and Mineral Reserves and compile technical reports. The

QPs from The RVN Group prepared this Technical Report Summary.

Technical Report Summary of the material Tailings Storage Facilities

13

2.3 Participants and Areas of Responsibilities

The following personnel were nominated to the project team, and their specific areas of responsibility

are shown in Table 2.1. The qualifications and appropriate experience of the authors are summarized in

Table 2.1.

Technical Report Summary of the material Tailings Storage Facilities

14

Table 2.1: List of QPs and their Responsibilities

Personnel

Company

Qualifications

Responsibility

Mpfariseni Mudau,

Pr.Sci.Nat.

The RVN Group

B.Sc. (Hons) Geology,

Graduate Diploma in Mining Engineering,

M.Sc. Mining Engineering,

B.Sc. Applied Mathematics and Statistics,

SACNASP Registration No.: 400305/12

Item

1 to 11 and

20 to 25

Steven Rupprecht,

FSAIMM

The RVN Group

B.Sc. Mining Engineering,

Ph.D. Mechanical Engineering

FSAIMM Registration No.: 701013 

Item

1 and

12 to 19

Source: The RVN Group, 2022

The QP responsible for reporting and signing off on the exploration activities and Mineral Resource

estimates is Mr Mpfariseni Mudau. Mr Mudau is a Professional Natural Scientist (with registration number

400305/12) registered with the South African Council for Natural Scientific Professions (SACNASP) with

more than five years of experience relevant to the drilling, estimation and reporting of TSF Mineral

Resources. Mr Mudau works for The RVN Group and is independent of Ergo and DRDGOLD.

The QP with responsibility for reporting and signing off of the Mineral Reserve estimates is Professor Steven

Rupprecht. Professor Rupprecht is a Fellow of the Southern African Institute of Mining and Metallurgy

(SAIMM with registration number: 701013) with more than five years of experience relevant to the

estimation and reporting of TSF Mineral Reserves. Professor Rupprecht is an associate of The RVN Group

and is independent of Ergo and DRDGOLD.

2.4 Sources of Information

Most of the technical information utilized for the preparation of this report was obtained from the drilling

campaigns that The RVN Group supervised. Other technical information and engineering data were

sourced from Ergo, their contractors and third-party reports available in the public domain. These

sources are acknowledged in the body of the report and listed in Item 24.

Information provided by the registrant upon which the QPs relied is listed in Item 25.

In preparing the report, the QPs have relied upon contributions from a range of technical, financial,

environmental and engineering specialists for the disciplines outside their expertise. Based on the

support and advice from the specialists, the QPs consider it reasonable to rely upon the

information/advice provided.

2.5 Site Inspection

Mr Mpfariseni Mudau visited the drilling projects on commencement, during, and completion of the

drilling campaigns. These visits were conducted in 2016, 2017, 2018, 2019, 2020, 2021 and 2022.

Mr Mudau further visited the sample sorting and storage facilities at the Ergo processing plant in Brakpan.

On several occasions, Mr Mudau also visited MAED Metallurgical Laboratories (Proprietary) Limited

(MAED) and SGS South Africa (Proprietary) Limited (SGS) where the samples were prepared and

analyzed. Mr Mudau also visited the mining sites on several occasions .

Technical Report Summary of the material Tailings Storage Facilities

15

The objectives of the site visits were to:

●

familiarize the QP with the TSFs and the general infrastructure ;

●

inspect the drilling and sampling sites;

●

conduct assessment of sampling methodologies, quality control processes and data validation;

●

provide training and conduct planned task observations ;

●

validate the geological logging;

●

inspect the sample storage area and the sample preparation methods;

●

discuss and agree on the analytical method with the laboratories; and

●

collection of database and additional technical information.

Steven Rupprecht conducted site visits to material and non-material TSFs in 2020, 2021 and 2022.

2.6 Units, Currencies and Survey Coordinate System

Unless otherwise stated, all figures included in this report are expressed in metric units. All geographic

coordinates are UTM WGS84 system or LO29 Meridian . The elevation Datum is the mean sea level.

All monetary figures expressed in this report are in South African Rand (ZAR) and United States Dollar

(USD).

A point is used as the decimal marker, and the comma is used for the thousand’s separator (for numbers

larger than 999).

Unless otherwise stated, the word

‘

tons

’

 denotes a metric ton (1,000kg). Table 2.2 presents the

abbreviations used in the report.

Table 2.2: List of Abbreviations

Units

Description

%

percentage

˚

degrees

˚

C

Degrees Centigrade

‘

minutes

“

seconds 

µm

Micron

3D

three-dimensional

AAS

Atomic Absorption Spectroscopy

AMD

acid mine drainage

AMIS

African Mineral Standards

amsl

above mean sea level

Anglo Lab

AngloGold Ashanti Limited Chemical Laboratory

Au

gold

CIL

Carbon-in-Leach

cm

centimeter(s)

CoV

Coefficient of Variation

CRM

Certified Reference Material

Crown Mines

Crown Mines Limited

DMRE

Department of Mineral Resources and Energy

DRDGOLD

DRDGOLD Limited

Technical Report Summary of the material Tailings Storage Facilities

16

Units

Description

EIA

Environmental Impact Assessment

EMP

Environmental Management Plan

EMPr

Environmental Management Program

Ergo

Ergo Mining (Proprietary) Limited

ERPM

East Rand Proprietary Mines Limited

Eskom

Electricity Supply Commission

g

gram(s)

g/l

grams per liter

g/t

grade grams per ton

Geografix

Geografix Surveys CC

GPS

Global Positioning System

ha

hectares = 100m-by-100m

HRD

Human Resource Development

IDW

Inverse Distance Weighting

InSAR

Interferometric Synthetic Aperture Radar

IRR

internal rate of return

ISO

International Organization for Standardization

JSE

Johannesburg Stock Exchange

kg

kilograms = 1,000 grams

kg/t

kilograms per ton

km

kilometer(s) = 1,000 meters

km

2

square kilometers

koz

kilo ounces= 1,000 ounces (troy)

kt

kilotons

ktpm

kilotons per month

LED

Local Economic Development

liter

Metric unit of volume = 1,000cm

3

LoM

Life-of-Mine

m

meter(s)

m

2

square meters

MAED

MAED Metallurgical Laboratories (Proprietary) Limited

mamsl

meters above mean sea level

mm

millimeter(s) = meter/1000

Moz

Million ounces (troy)

MR

Mining Right

Mt

Million metric tons

Mtpa

Million tons per annum

MWP

Mining Works Program

NaCN

sodium cyanide

NERSA

National Energy Regulator of South Africa

NN

Nearest Neighbor

NNR

National Nuclear Regulator

NPV

net present value

NYSE

New York Stock Exchange

oz

Troy ounces = 31.1034768 grams

pH

quantitative measure of the acidity or basicity of a solution

ppm

parts per million

Technical Report Summary of the material Tailings Storage Facilities

17

Units

Description

PR

Prospecting Right

PWP

Prospecting Work Program

QA

Quality Assurance

QC

Quality Control

QP

Qualified Persons

RC

Reverse Circulation

RoM

Run-of-Mine

SANAS

South African National Accreditation System

SCADA

supervisory control and data acquisition

SEC

Securities and Exchange Commission

SGS

SGS South Africa (Proprietary) Limited

S-K 1300

Subpart 1300 of Regulation S-K under the U.S. Securities Exchange Act of 1934

SLP

Social and Labor Plan

t

metric ton = 1,000 kilograms

t/m

3

density - ton per cubic meter

TCTA

Trans-Caledon Tunnel Authority

The RVN Group

The RVN Group (Proprietary) Limited

this Report

Technical Report Summary

tons

metric tons = 1,000 kilograms 

TPMS

Tailings Performance Management System

USD

United States Dollars

WGS84

World Geographic System 1984

WUL

Water Use License

ZAR

South African Rand

2.7 Independence

The QPs or The RVN Group received a fee for preparing this Technical Report Summary in accordance

with standard professional consulting practice. The QPs or The RVN Group will receive no other benefit

for the preparation of this report. Neither QPs, The RVN Group, nor any of its employees and associates

employed in the preparation of this report has any pecuniary or beneficial interest in Ergo, DRDGOLD ,

or their associates.

The QPs consider themselves independent.

Technical Report Summary of the material Tailings Storage Facilities

18

3 Property Description

3.1 Location and Operations Overview

Ergo is reclaiming TSFs in the City of Johannesburg and the City of Ekurhuleni, Gauteng, South Africa.

The Crown and City Deep Complexes are located in the City of Johannesburg while all other TSFs and

the sand dumps are located in the City of Ekurhuleni, as shown in Figure 3.1.

This TRS covers a total of 18 material TSFs of varying sizes and one sand dump. The smaller TSFs or clean-

up sites (79 in total) are not extensively covered in this report for various reasons: they are not material

as most are too small while others are not part of an immediate plan to be included in the Life-of-Mine

plan by Ergo (e.g., Fleurhof Complex). The 18 material TSFs and one sand dump contribute

approximately 89% of the total Mineral Resource, while the remaining 79 smaller TSFs and clean-up sites

only contribute 11% to the total Ergo Mineral Resource estimates. Of the total Ergo Mineral Reserve

declared, 92% contribution by tonnage is from the material properties. Thus, Ergo considers the 79

smaller TSFs and clean-up sites not material (Figure 3.2).

The sand dumps (5A10 and 5L27) are combined to form one elongated structure of varying heights. The

two small dumps on the north and east are known as 5L27 and the center sand dump is 5A10. These

dumps are joined and have similar properties. They were modelled as 5A10/5L27 but then separated for

reporting Mineral Resource estimate.

Of the total material properties, 18 are slime TSFs and one is a sand dump (5A10/5L27). Slime is a very

fine material, while sand is course-grained.

The areas occupied by the 18 material TSFs and a sand dump are shown in Table 3.1. Engineering

parameters and topography determined the size and shapes of the properties at the time of deposition

of the waste products from the respective processing plants.

Technical Report Summary of the material Tailings Storage Facilities

19

Table 3.1: Footprint Areas of the Material TSFs

TSF

Centre Coordinates

Area

(ha)

Maximum Height

(m)

Crown

3L5 (Diepkloof)

26

0

13’34.95”S, 27

0

57’09.70”E

130.00

67.50

3L7 (Mooifontein)

26

0

13’35.85”S, 27

0

13’35.85”E

87.00

88.50

3L8 (GMTS)

26

0

14’23.75”S, 27

0

58’07.91”E

147.00

94.50

City Deep

4L3

26°13'51.72"S, 28° 5’50.63”E

36.61

40.50

4L4

26°13’59.91”S, 28° 6’9.99”E

23.81

16.50

4L6

26°13’59.56”S, 28° 7’15.02”E

27.15

19.50

Knights

4L14

26°12'23.76"S, 28° 8'54.38"E

10.27

37.50

4L50

26°15'18.78"S, 28°13'8.60"E

68.03

40.50

Ergo

Rooikraal

26

0

21’48.16” S, 28

0

17’40.88”E

141.04

47.50

7L15

26°19'49.59"S, 28°24'46.01"E

73.28

37.50

Marievale

7L4 

26°19'30.94"S, 28°30'5.07"E

133.48

25.00

7L5

26°19'55.08"S, 28°30'3.08"E

26.91

22.50

7L6

26°19'56.20"S, 28°30'22.96"E

46.73

34.50

7L7

26°20'51.49"S, 28°30'5.43"E

47.00

13.50

Grootvlei

6L16

26°14'31.94"S, 28°28'55.51"E

112.13

31.50

6L17

26°13'18.99"S, 28°29'23.20"E

110.02

40.50

6L17A

26°14'0.25"S, 28°29'42.67"E

85.05

25.50

5A10/5L27

5A10/5L27

26°13'9.79"S, 28°23'51.84"E

202.00

68.00*

Daggafontein

Daggafontein TSF

26

0

17’56.48” S, 28

0

31’55.10”E

462.21

64.50

Total Area (ha)

1,969.72

Source: The RVN Group, 2022

Note

:

*estimated height as drilling could not reach the base of the sand dump, only drilled up to 52.5m

.

Technical Report Summary of the material Tailings Storage Facilities

20

Figure 3.1: Location of the Material TSFs and Infrastructure (the material properties of Ergo)

Technical Report Summary of the material Tailings Storage Facilities

21

Technical Report Summary of the material Tailings Storage Facilities

22

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

23

Figure 3.2: Location of the Material Properties in Relation to the Smaller TSFs and Clean-up Operations

Technical Report Summary of the material Tailings Storage Facilities

24

Technical Report Summary of the material Tailings Storage Facilities

25

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

26

Other material properties of Ergo include:

●

Knights Plant;

●

Ergo Plant;

●

Brakpan/Withok TSF;

●

pump stations;

●

a network of pipelines;

●

City Milling Plant;

●

Central Water Facility; and

●

solar power project.

3.2 Mineral Rights Conditions

TSFs are in most instances considered movable, and capable of being owned under the common law

separately from land. As such they are distinguishable from underground minerals, which can no longer

be individually owned in South African but in respect of which the Department of Mineral Resources

and Energy (DMRE) may issue Mining Rights in terms of the MPRDA of 2002 (MPRDA), as amended. The

construct of the MPRDA caused the minerals in certain TSFs to therefore fall outside the regulatory reach

of the MPRDA. The transitional arrangements of the MPRDA provided for existing operations however,

to convert old order rights (Mining Licenses held under the previous dispensation) to new order rights.

Ergo successfully converted its old order licenses to Mining Rights, and is seeking to consolidate them

into a single right. Now, in terms of reserves in TSFs over which there were no old order rights,

Environmental Approvals are obtained from the DMRE for the retreatment of such TSFs – a somewhat

pragmatic, yet administratively competent means of overcoming the drafting gap in the MPRDA.

For an exploration project, a Prospecting Right (PR), valid for five years, is issued, and for a mining

operation, a Mining Right (MR) valid for up to 30 years, is issued. The PR, which is conducted in terms of

a Prospecting Work Program (PWP), is renewable for a further three years. The MR is undertaken in terms

of the Mining Works Program (MWP), Social and Labor Plan (SLP), and an approved Environmental

Management Program (EMPr)which can be renewed for a further 30 years. A PR or MR may be

cancelled or suspended subject to Section 47 of the MPRDA.

The MPRDA makes provisions relating to the ownership and Broad-Based Socio-Economic

Empowerment Charter. A shareholding, equity, interest or participation in the mining right or joint

venture, or a controlling interest in a company/joint venture may not be encumbered, ceded,

transferred, mortgaged, let, sublet, assigned, alienated, or otherwise disposed of without the written

consent of the Minister, except in the case of a change of controlling interest in listed companies.

The SLP is submitted to the DMRE every five years for approval, while the SLP’s annual progress report is

submitted annually to the DMRE.

The Environmental Management Plan (EMP) and Water Use License (WUL) are assessed for compliance

annually.

Technical Report Summary of the material Tailings Storage Facilities

27

3.3 Mineral Title

Ergo title in its TSFs is vested in either common law ownership or private treaty and it holds either Mining

and Prospecting Rights as presented in Table 3.2 or Environmental Approvals in respect of the same.

Ergo has submitted applications for the renewal of its mining rights and prospecting rights. The renewal

applications were made to the DMRE on different dates per mining right. Ergo is in the process of a

consolidation of its mining rights and as such has applied to extend the mining period for a further 30

years through its consolidated mine works program. The period of 30 years is the maximum period

allowable for a Mining Right renewal as detailed in the MPRDA, as amended.

This report has considered Section 24(5) of the MPRDA, as amended:

“

A mining right in respect of which an application for renewal has been lodged shall despite its expiry

date remain in force until such time as such application has been granted or refused.

”

The same applies to the prospecting right (section18(5) of the mentioned Act).

Freehold landowners are presented in Table 3.3. Ergo owns a significant portion of freehold where the

TSFs and sand dumps are located. Where Ergo does not own the property, use and access agreements

are in place with third-party landowners, with the exception of the landowner on which certain of the

Marievale dumps are situated. Access to the TSFs for Prospecting Right purposes is enabled through the

provisions in the MPRDA.

Table 3.2: Mineral Rights Information as at 30 June 2022

Complex

Permit

Holder

Permit Type

Reference

Number with

the DMRE

Expiry Date

Renewal

Submission

Application

Date

Renewal

Reference

Number with

the DMRE

Crown

Ergo

Mining Right

GP184MR

20/06/2014

24/03/2014

GP 10022 MR

City Deep

Ergo

Mining Right

GP185MR

20/06/2014

24/03/2014

GP 10023 MR

Knights

Ergo

Mining Right

GP187MR

20/06/2018

13/03/2018

GP 10067 MR

Ergo

Ergo

Mining Right

GP158MR

27/10/2021

23/07/2021

GP 10097 MR

Marievale (7L4)

Ergo

Prospecting Right

GP10348

19/02/2022

Not

applicable

Not

applicable

Marievale (7L5,

7L6 and 7L7)

Ergo

Common Law

Ownership

Not

applicable

Not

applicable

Not

applicable

Not

applicable

Grootvlei

Ergo

Prospecting Right

GP10044PR

21/04/2019

28/03/2019

GP 10592 PR*

5A10/5L27

Ergo

Mining Right

GP158MR

27/10/2021

23/07/2021

GP 10097 MR

Daggafontein TSF

Ergo

Mining Right

GP158MR

27/10/2021

23/07/2021

GP 10097 MR

Source: DRDGOLD, 2022

Table 3.3: Land Tenure Information

Reclamation Sites

Surface Rights Owner

Crown Complex

Ergo and Innovative Property Solutions(iPROP)

City Deep Complex

Ergo and IPROP

Knights Complex

Ergo, Abland, Living Africa and EMM

Technical Report Summary of the material Tailings Storage Facilities

28

Ergo Complex

Ergo and Ekurhuleni Metropolitan Municipality

Marievale Complex

Ergo, Ekurhuleni Metropolitan Municipality, Scarlet Sun and STI Consulting

Grootvlei Complex

Ekurhuleni Metropolitan Municipality and various private owners

5A10/5L27 Sand Dump

Marcon Group

Daggafontein TSF

Ergo

Source: DRDGOLD, 2022

3.4 Violation and Fines

Ergo has no fines resulting from violating the mineral rights conditions.

3.5 Royalties

Ergo is not required to pay royalties to the State, nor does it receive royalties from any other operation.

Royalties in South Africa are guided by the Mineral and Petroleum Resources Royalty Act, 2002 (Act

No. 28 of 2008) (MPRRA).

Ergo does not pay royalty on the retreatment of TSFs and sand dumps as the treatment of TSFs and sand

dumps does not trigger the requirement to pay royalties .

3.6 Legal Proceedings and Significant Encumbrances to the Property

The QP was advised by Ergo that there are no material legal challenges concerning its Mineral Resource

and Mineral Reserve, except for Grootvlei and Marievale Complexes. The QPs find it reasonable to rely

on the legal opinion provided by Ergo. 

From the documentation reviewed and input by the relevant Technical Specialists, the QPs could not

identify any significant factors or risks with regards to the title permitting, surface ownership,

environmental and community factors that would prevent the evaluation or economic extraction of

the TSFs. The QPs were assured that Ergo Mining complies with all title and environmental permitting

requirements. The QPs were informed by Ergo Mining that no significant factors or risks might affect

access, title, or the right or ability to perform work on the TSFs, except for Grootvlei and Marievale

Complexes.

Grootvlei Comp lex:

Ergo has submitted a renewal application of its prospecting rights over Grootvlei

dumps 6L16, 6L17 and 6L17A to the DMRE. During the 2022 financial year, an external party raised a

conflicting claim of common law ownership of 6L16, 6L17 and 6L17A TSFs. Although the claim was based

on common law ownership and no attempt has been made to set aside the prospecting rights over the

TSFs, the Grootvlei TSFs have been excluded from the Mineral Reserves statement and the Life-of-Mine

(LoM) plan but included in the Mineral Resources statement.

Marievale Complex:

Ergo acquired the 7L5, 7L6 and 7L7 TSFs in terms of a written notarial executed

deed of sale during 2019 and took possession of the TSFs on 8 April 2019. It has since also obtained the

requisite National Environmental Management Act, 1998 (Act No. 107 of 1998) (NEMA) regulatory

approvals to retreat the said TSFs. During the 2022 financial year, the owner of the land on which 7L5,

7L6 and 7L7 are situated, an estimated 36,524t out of the total 54,114t comprising the Marievale cluster,

notified Ergo that in its view, the said TSFs had acceded to the land and that it had become the owner

of the TSFs. Ergo disputes the claim of legal title and the matter is to be referred to arbitration.

Technical Report Summary of the material Tailings Storage Facilities

29

All ownership requirements were met when the TSFs were purchased by Ergo and therefore the TSFs are

still included in the Mineral Reserves. Whilst Ergo has received confident legal advice on the merits of its

claim, in the event that the arbitration goes against Ergo, its Mineral Reserves will reduce by 35.52Mt

(0.35Moz at 0.29g/t). Inasmuch as it then enters into a commercial arrangement with the land-owner,

the financial benefit of this portion of the Marievale cluster will be reduced by whatever benefit is

agreed to in favor of the land-owner.

Ergo has a submitted renewal application to the DMRE for the prospecting rights it holds over 7L4 TSF.

The entity (who holds common law ownership rights over the land on which the TSF is situated and the

TSF itself) has agreed to relinquish ownership in favor of Ergo, provided that Ergo undertakes to:

●

make a notional amount payment;

●

suitably remove the TSF; and

●

rehabilitate the land.

A draft contract stipulating the terms of such agreement is awaiting final signature.

4 Accessibility, Climate, Local Resources, Infrastructure and Physiography

4.1 Topography, Elevation and Vegetation

The project areas fall in the Grassland Biome of South Africa. The Grassland Biome is found on the high

central plateau of South Africa and the inland areas of Kwazulu -Natal and the Eastern Cape.

The topography is mainly flat and elevation ranges between 1,560mamsl and 1,700mamsl.

Natural vegetation for the project is limited to areas outside the urban footprint. Within the urban

environment where most of the TSFs are to be reclaimed , little vegetation occurs in its natural state.

The TSFs and sand dumps are situated in highly urbanized and industrialized areas with limited fauna

and flora. The TSFs are man-made and the trees and grasses on the TSFs have been planted to prevent

dust and erosion from the TSFs.

4.2 Access, Towns and Regional Infrastructure

The TSFs and sand dumps are situated in the Gauteng Province of South Africa, Gauteng is the most

industrialized province in South Africa and the infrastructure is adequate. All the regional and on-site

infrastructure that is required for mining is well established. There is a good supply chain for all necessary

consumables and equipment in or near the mine sites.

The areas surrounding the mine sites have good health facilities (i.e., public and private hospitals) and

education facilities (i.e., ranging from pre-primary to secondary and tertiary education levels).

A good road transportation system can be found in the area. The TSFs and sand dumps are well serviced

by highways, paved regional roads and a network of dirt tracks that the Ergo utilized to access mining

and project visits. The QPs consider access to the TSFs to be in good condition. For international supplies

Technical Report Summary of the material Tailings Storage Facilities

30

or travel, the OR Tambo and Lanseria International Airports, in Kempton Park and Lanseria respectively,

are well-positioned to service Ergo.

Tele-communication on the TSFs and sand dumps is good for all major network providers. Most parts of

the project areas are fully covered by the third or fourth generation (3G or 4G) wireless mobile

telecommunications technology. Other areas are now covered by high-end 5G technology.

Item 15 presents the infrastructure in more detail.

4.3 Climate

A summer rainfall climate prevails in the areas. Summer rain occurs mainly in the form of thunderstorms

with a mean annual precipitation of approximately 680mm, and evaporation is about 1,800mm per

year. Winds are generally light and blow predominantly from the northwest. Winters are cold and dry.

Extreme weather conditions occur in the form of frost (2 to 20 occurrences per annum) and the

occasional hailstorm.

The average annual temperature for the year is approximately 19˚C, with average maximum

temperatures ranging between 22˚C and 32˚C and average minimum temperatures ranging between

2˚C and 18˚C. The hottest months are from December to February. During April and May, there is a

noticeable drop in temperature, which signals the commencement of winter. The coldest months are

June and July. Rains and temperature have minimal effects on operations.

The area generally has a high evaporation rate in the summer months from November to January. This

gives rise to high relative humidity. Evaporation is greater in summer than in winter due to higher ambient

temperatures.

There are no long-term associated climatic risks, other than those associated with climate change and

global warming, and the operating season is year-round.

4.4 Infrastructure and Bulk Service Supplies

The TSFs and sand dumps are situated in the well-developed province of Gauteng and have the most

major supplies. All the regional and on-site infrastructure that is required for mining and processing is well

established. There is a good supply chain for all necessary consumables and equipment in or near the

mine sites. Section 15 of this report details the infrastructure relevant to Ergo.

The TSFs and sand dumps are located near hospitals offering basic and advanced medical care.

The project areas are supplied with bulk electricity from the regional grid supplied by Eskom, the national

power supplier, or by the local municipality. Like most parts of South Africa, the operations are affected

by occasional load shedding implemented by Eskom during periods of constrained power generation.

Water to the TSFs and related infrastructure is supplied by Rand Water. Ergo recycles most of the water.

4.5 Personnel Sources

Where mining activities take place, Ergo has commissioned contractors to conduct mining and secure

the TSFs. Where there are no mining activities, Ergo has employed contractors to maintain the TSFs (to

Technical Report Summary of the material Tailings Storage Facilities

31

minimize dust and monitor water levels on the TSFs and sand dumps) and security companies to secure

the properties.

Ergo employees conduct site inspections on a regular basis of the project TSFs and sand dumps.

Should additional employees be required, the surrounding areas have a large semi-skilled and skilled

workforce. The cities of Johannesburg and Ekurhuleni have a large source of talent for trades and

technical management.

The majority of employees hired by Ergo are sourced from Gauteng Province, where all the properties

are situated. Contractors and specialist consultants are also predominantly based in Gauteng Province.

Technical Report Summary of the material Tailings Storage Facilities

32

5 History

5.1 Ownership

Anglo American Corporation commissioned the Ergo facility (processing plant) on the East Rand in 1977.

The objective was to recover gold, uranium and produce sulfuric acid from surface tailings material via

a metallurgical flotation process. In 1977 a carbon in leach (CIL) plant was added. In 1990, when the

uranium market collapsed, the uranium plant and the larger of the two acid plants were closed down.

In 1998 Ergo became part of Anglo Gold Limited (later Anglo Gold Ashanti Limited). In 2005 Ergo was

closed down.

In 2007, Ergo (Pty) Limited was formed as a joint venture between DRDGOLD and Mintails to re-establish

the tailings treatment operations. A year later (2008) re-commissioning of the plant started, and Ergo

acquired the Mintails’ stake in the gold recovery phase of the project. In 2009 a second feed line was

brought into the Ergo plant from the Elsburg TSFs and the plant capacity doubled to 1.2 Mt per month.

In 2010, DRDGOLD acquired the balance of Mintails ’ interest.

5.1.1 Crown Complex

Crown Mines Limited (Crown Mines), previously known as Rand Mines (Milling and Mining) Limited,

belonged to Rand Mining Proprietary Group, which commenced retreatment operations in 1982. At

least 90% of the Crown Complex material was deposited onto the Crown TSF Complex Facility by Crown

Gold Recoveries, which retreated processed material originally mined from the historical mines in the

area. The Crown complex is situated on the farm Mooifontein 225-IQ.

5.1.2 City Deep complex

City Deep belonged to Rand Mines (Milling and Mining) Limited and fell under the same group as Crown

Gold Recovery. Records indicate that in 1986 City Deep Complex belonged to City Deep Rand Mines.

Most of City Deep TSFs are located on the farms Elandsfontein 107-IR, Kliprivierfontein 106-IR and

Doornfontein 92-IR.

5.1.3 Knight Complex

Most of the TSFs in the Knights complex were previously owned by Simmer and Jack dating back to

1986. Witwatersrand Gold Mine owned other TSFs.

5.1.4 Ergo Complex

The Ergo Complex was created by East Rand Proprietary Mines Limited (ERPM) around 1958. ERPM in

Boksburg was established more than 125 years ago as an underground gold mining operation and

produced gold from 1896 to 2008. ERPM had approximately 15 shafts in the Elsburg area, which were

the primary sources of the tailings material deposited onto TSFs 4L47/48/49 and 50. The Ergo complex is

situated on the farms Klippoortje 110-IR and 112-IR.

Technical Report Summary of the material Tailings Storage Facilities

33

5.1.5 Marievale Complex

Marievale Complex was previously owned by Gencor Limited (General Mining Union Corporation)

(Gencor) and operated by Marievale Consolidated Mines. The primary commodity was gold, and the

secondary commodity was silver. The first year of production was 1939. Mining stopped in 1998. The

Marievale complex is located on the farm Vlakfontein 281-IR.

5.1.6 Grootvlei Complex

Grootvlei was previously owned by Gencor and operated by Grootvlei Proprietary Mines Limited from

1967 to 1981 at an average grade of 5g/t of gold. The registered owner in 1986 was DUMPCO Limited.

Mining stopped in 2005. Grootvlei is located on the farm Grootvlei 124-IR.

5.1.7 5A10/5L27

The Consolidated Modderfontein Mine deposited mine tailings on the 5A10/5L27 sand dump during the

1980s. Before then, the sand dump was owned by Government Gold Mine.

5.1.8 Daggafontein TSF

Daggafontein TSF was previously owned by Daggafontein Mines. Tailings deposition onto the TSF

commenced around 1982 and ceased around 2002 when the mine ceased operations. Currently, the

TSF is owned by Ergo.

5.2 Construction of the TSFs and Sand Dumps

The TSFs were constructed in accordance with the then Chamber of Mines guidelines and best practices

at the time. The guidelines provided for a starter wall, toe drain and blanket drain. Gravity penstocks

were provided on all TSFs, which were subsequently replaced with elevated penstocks during their

operations. The final design heights for a ‘typical’ TSF operated using day-walls were generally between

30m and 100m.

All the TSFs were constructed as upstream TSFs. Upstream TSFs need to be raised slowly to allow the solid

tailings time to dry and consolidate enough to support a new level of the TSF.

The sand dump material was deposited by trucks or cocopans.

Technical Report Summary of the material Tailings Storage Facilities

34

Table 5.1 presents the history and status of TSFs and the sand dump. The TSFs and the sand dump are

considered old, and the properties have been dormant for a considerable number of years.

Table 5.1: History and Status of the TSFs and Sand Dump

TSF/Sand Dump

Commissioned

Date

Decommissioned

Date

Status as at

30 June 2022

Age since becoming

Dormant (Years)

Crown

3L5

+/-1920

2009

Dormant

12

3L7

Dormant

3L8

Dormant

City Deep

4L3

1965

1984

Development

37

4L4

Development

4L6

Development

Knights

4L14

1960

2000

Dormant

21

4L50

1968

1998

Mining

NA

Ergo

Rooikraal

1985

2012

Development

9

7L15

1964

1986

Dormant

35

Marievale

7L4

1964

1998

Dormant

23

7L5

1964

1998

Dormant

23

7L6

1964

1998

Dormant

23

7L7

1964

1998

Dormant

23

Grootvlei

6L16

1964

2005

Dormant

16

6L17

2005

Dormant

16

6L17A

2005

Dormant

16

5A10/5L27

5A10/5L27

1960

1986

Mining

NA

Daggafontein

Daggafontein

1970

2003

Dormant

17

Source: DRDGOLD, 2022

5.3 Previous Exploration and Mine Development

5.3.1 Previous Evaluation Drilling

Previous evaluation drilling was completed on the TSFs in the 1970s by Anglo-American, and from 2006

to 2008 by Ergo and Mintails SA (Proprietary) Limited. The QP was made aware of these activities,

however the QP did not use data acquired before 2008 in this report as data quality assessment and

validation could not be performed.

5.3.2 Previous Development

In 1976, the construction of the processing plant and associated infrastructure commenced and Ergo

formally came into production on 25 February 1978.

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Table 5.2 presents Ergo’s production data over the last five years.

Table 5.2: ERGO Production History

Date

Tons Mined

(Mt)

Yield Au

(g/t)

Gold Produced

(kg)

Gold Produced

(koz)

30 June 2018

24.3

0.19

4,679

150

30 June 2019

23.2

0.19

4,493

144

30 June 2020

*

20.2

0.20

3,989

128

30 June 2021

23.0

0.19

4,263

137

30 June 2022

22.1

0.19

4,156

134

Source: DRDGOLD, 2022

Note: *production was affected by COVID-19 national lockdown.

Technical Report Summary of the material Tailings Storage Facilities

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6 Geological Setting, Mineralization and Deposit

6.1 Regional Geology

The TSFs are man-made features, and mineral distribution reflects the artificial nature of the deposit. The

materials are the waste products (tailings) of the mining and metallurgical process recovery from the

Witwatersrand and Transvaal Supergroups gold deposits.

These tailings consist predominantly of quartz, lesser amounts of mica, chlorite, chloritoid, pyrite

(1% to 2%) and low concentrations of gold, uranium and sulfur.

Gold was discovered in the conglomerates of the Witwatersrand sedimentary basin in about 1886.

The Witwatersrand Supergroup is aerially and structurally related to the underlying Dominion Reef System

and the overlying Ventersdorp System. The Supergroup is an elongated sedimentary basin stretching

some 320km in a north-easterly direction and 160km in a north-westerly direction. The upper portions of

the Witwatersrand Supergroup contain quartz conglomerates that have been mined for their gold and

uranium contents.

The Transvaal Supergroup is a stratigraphic unit consisting of clastic sediments, carbonates, banded iron

formations and volcanics younger than the Witwatersrand Supergroup. It occasionally directly overlies

the gold-bearing conglomerates of the Witwatersrand Supergroup where the Ventersdorp Volcanics

have been eroded or were not developed. At the base of the Transvaal Supergroup is a conglomerate

layer, the Black Reef, that has been mined for gold.

The operations are situated in the Witwatersrand Central Rand and East Goldfields. The East Goldfield

are linked to the Central basin across a large monoclinal structure, the Springs Monocline. The major

economic horizons mined were the South Reef together with Main Reef, Main Reef Leader and the

Elsburg and Kimberley Reefs. The Black Reef, where mineralized, was also mined in the area.

6.2 Mineralization, Local and Property Geology

The TSFs has been processed through metallurgical plants that eject a residue (tailings) which is relatively

uniform in terms of gold mineralization when compared with the natural deposit from which the material

is derived. The variation between gold grades is small as the process residue dump was constructed in

layers/benches. Grade variation primarily follows variations in the processing and, to a lesser extent,

primary deposits characteristic. The gold mineralization is fairly well distributed throughout the TSF.

The TSFs are the by-product of the mineral recovery process. They took the form of a liquid slurry made

of fine mineral particles

–

 created when mined ore was crushed, milled and processed. The tailings were

pumped to the TSFs which were constructed using earth dam s. As the residue of the tailings gradually

drained and became compacted, grass and other vegetation were planted to rehabilitate the

environment.

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The TSFs and sand dumps evaluated in this report originated from different sources or processing plants,

as shown in Table 6.1.

Table 6.1: Origin of the TSF and Sand Dump Material

TSF/Sand Dump

Source Mine

Mined Reef

Crown Complex

3L5

Crown Mines

Main Reef

3L7

Crown Mines

Main Reef

3L8

Crown Mines

Main Reef

City Deep Complex

4L3

City Deep Gold Mine (Proprietary) Limited

Kimberley Reef

4L5

City Deep Gold Mine (Proprietary) Limited

Kimberley Reef

4L6

City Deep Gold Mine (Proprietary) Limited

Kimberley Reef

Knights Complex

4L14

Simmer and Jack Gold Mine

Black Reef

4L50

Witwatersrand Gold Mine

Black Reef/Elsburg

Ergo Complex

Rooikraal

Knights Plant

Residue from Knights Plant

7L15

Vlakfontein Mine

Black Reef

Marievale Complex

7L4 

Marievale Consolidated Mine

Kimberley Reef, Nigel Reef and Main

7L5

Marievale Consolidated Mine

Kimberley Reef, Nigel Reef and Main

7L6

Marievale Consolidated Mine

Kimberley Reef, Nigel Reef and Main

7L7

Marievale Consolidated Mine

Kimberley Reef, Nigel Reef and Main

Grootvlei Complex

6L16

Grootvlei Proprietary Mines Limited

Kimberley Reef

6L17

Grootvlei Proprietary Mines Limited

Kimberley Reef

6L17A

Grootvlei Proprietary Mines Limited

Kimberley Reef

5A10/5L27 Sand Dumps

5A10/5L27

Modderfontein East Mine

Main Reef Leader

Daggafontein TSF

Daggafontein 

Daggafontein Mine

Main Reef

Source: DRDGOLD, 2022

6.3 Stratigraphy and Cross-sections

Unlike the stratigraphy of the in situ mineral deposit, the stratigraphy of a TSF or sand dump is man-made.

A typical stratigraphy is presented in Figure 6.1. Slime was deposited on soil (original ground level). The

color of topsoil ranges from red to black. In some cases, soil is mineralized or enriched.

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Figure 6.1: A Typical Stratigraphy for Ergo’s TSFs

Source: The RVN Group, 2022

A typical cross-section of a TSF is shown in Figure 6.2 and Figure 6.3.

Figure 6.2: Grootvlei Complex (6L17) Map showing Location of Cross-section

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39

Source: The RVD Group, 2022

 Figure 6.3: Cross-section of the Grootvlei Complex (6L17)

Source: The RVN Group, 2022

6.4 Deposit Type

The deposits under consideration are man-made features that are sometimes referred to as dumps,

tailing dams, or simply mine dams.

The TSF or sand dump generally lies above the prevailing ground level and there is no host rock. No

geological or mineralization controls are relevant to the TSFs or sand dumps as they are man-made

features.

The engineering design parameters determine the size and shape of the TSF or sand dump at the time

of the deposition of the waste products from the respective plants.

Technical Report Summary of the material Tailings Storage Facilities

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7 Exploration

7.1 Exploration

The TSFs are man-made engineering features and typical exploration programs (geophysics, trenching,

mapping and soil sampling) were not undertaken on the TSFs. An evaluation drilling program was

conducted on the TSFs. No exploration work was required to locate the TSFs, as their locations are well

known, rising well above ground level. The QP considered non-drilling exploration to be not material to

the Ergo properties.

7.2 Topographic Surveys

The topographic surfaces of the TSFs were surveyed by Jaco van Staden, a qualified surveyor from

Geografix Surveys CC (Geografix), using a differential Global Positioning System (GPS) unit. The method

has an accuracy in the range of 10cm. The conventional survey equipment (total stations, prisms and

related equipment) and GPS Real Time Kinetic systems were used to accurately determine the

coordinated positions of the surface features as required to create a digital terrain model.

Daily calibration through transformation was completed to ensure the instruments reported accurate

results. This standard procedure was performed daily before surveying. After surveying was conducted

or when the day’s work was completed, the calibration was rechecked through measurements of the

benchmark points to confirm that the instruments measured the correct values. Data from survey

measurements were checked through repeated measurements of selected points. No bias was

identified.

Surveys were undertaken on a 10m grid and measurements were also taken on all breaker lines. An

additional 10m to 20m outside the footprint of each TSF and sand dump was also surveyed.

No additional tailings material was deposited on the TSFs after the surveys were conducted. For the TSFs

where mining is taking place (4L50 and 5A10/5L27), monthly surveys are completed, and the tonnage

is depleted from the Mineral Resources and Mineral Reserves up to 30 June 2022. The details of the

survey information are presented in Table 7.1.

The QP was satisfied to rely on the survey measurements as an accurate representation of the TSFs and

sand dumps.

7.3 Evaluation Drilling

Evaluation drilling campaigns were completed on the TSFs and sand dumps. The drilling grid was not

always regular due to access issues; however, the QP noted that drill holes were well spread. The well-

spread drill holes ensured that the samples collected were representative of the respective TSFs and

sand dumps.

7.4 Drilling Methodology

Two drilling techniques were followed by specialized independent drilling contractors on the TSFs. The

Reverse Circulation (RC) method was implemented where the auger drilling technique could not drill to

Technical Report Summary of the material Tailings Storage Facilities

41

the base of the TSF due to drill hole length exceeding 55m or areas of high moisture content at the base

of the TSF.

The QP was satisfied that all measures were taken to ensure that drilling, sampling and recoveries were

acceptable and would not affect the accuracy and reliability of the results. The experienced geologists

from The RVN Group monitored the drilling process. The QP made ad-hoc site visits during drilling and

sampling. In the opinion of the QP, the processes followed were adequate for collecting quality samples

and information for use in the interpretation of results and in the Mineral Resource estimation.

Table 7.1: Survey Details of the Material from the TSFs and Sand Dumps

TSF/Sand Dump

Area 

(ha)*

Date Surveyed**

Coordinate System, Datum

Crown

3L5 (Diepkloof)

158.5

02/09/2013

WGS84 LO27, amsl***

3L7 (Mooifontein)

108.4

15/08/2013

WGS84 LO27, amsl

3L8 (GMTS)

159.3

20/09/2013

WGS84 LO27, amsl

City Deep

4L3

33.9

15/05/2017

WGS84 LO29, amsl

4L4

20.6

08/06/2017

WGS84 LO29, amsl

4L6

44.2

15/06/2017

WGS84 LO29, amsl

Knights

4L14

22.4

13/11/2015

WGS84 LO29, amsl

4L50

55.5

19/05/2017

WGS84 LO29, amsl

Ergo

Rooikraal

136.8

23/05/2018

WGS84 LO29, amsl

7L15

97.6

23/05/2008

WGS84 LO29, amsl

Marievale

7L4 

116.3

19/01/2009

WGS84 LO29, amsl

7L5

31.1

08/01/2009

WGS84 LO29, amsl

7L6

62.0

20/01/2009

WGS84 LO29, amsl

7L7

69.1

22/01/2009

WGS84 LO29, amsl

Grootvlei

6L16

127.9

15/05/2015

WGS84 LO29, amsl

6L17

130.7

15/05/2015

WGS84 LO29, amsl

6L17A

85.7

15/05/2015

WGS84 LO29, amsl

5A10/5L27

5A10/5L27

56.7

26/02/2008

WGS84 LO29, amsl

Daggafontein

Daggafontein TSF

476.9

12/08/2016

WGS84 LO29, amsl

Total Area (Ha)

1,993.6

Source: The RVN Group, 2022

Note:

*area includes 10m outside the TSF footprint

**date before mining (4L50 TSF and 5A10/5L27 sand dump are surveyed monthly for production purpose s)

***amsl is the abbreviation for above mean sea level

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7.4.1 Auger Drilling

Auger drilling, a cost-effective method, was commissioned by Ergo on most of their TSFs for holes less

than 55m and located within areas of lower moisture content .

With auger drilling, the rotation of a helical screw causes the blade of the screw to lift the sample to the

surface. This drilling method does not require heavy machinery in order to drill to the desired depth. This

auger method can be used for shallow environmental drilling, geotechnical drilling, soil engineering and

mineral deposits where the formation is soft and the hole does not collapse. This is done by pressing the

spiral rods into the ground using a drilling head machine which can drill up to a depth of 55m.

Samples were collected through the spiral at every 1.5m interval and the spiral was cleaned with water

and brushed clean after every run.

7.4.2 Reverse Circulation

RC drilling, with better sample recovery than auger drilling, is a method of drilling which uses dual wall

drill rods consisting of an outer drill rod with an inner tube. These hollow inner tubes allow the drill cuttings

to be transported back to the surface in a continuous, steady flow.

The drilling mechanism is often a pneumatic reciprocating piston called a hammer, which in turn drives

a clay cutter, specifically made to cut soft material such as tailings and soil.

The clay cutter is used to remove samples that are pushed through the machine with compressed air.

When air is blown down the annulus (ring-shaped structure) of the rod, the pressure shift creates a

reverse circulation, bringing the tailings up the inner tube. When the tailings reach a deflector box at

the top of the rig, the material is moved through a hose attached to the top of the cyclone.

The drill cuttings will travel around the cyclone until they fall through the bottom opening into a sample

bag. These bags are sorted and marked with the location and depth where the sample was collected.

RC drilling technique can drill up to 1,500m deep. The other benefits of RC drilling include:

●

more reliable and less contaminated samples than those from auger drilling;

●

a high drill penetration rate;

●

a larger sample size; and

●

a more cost-effective method than diamond or sonic drilling.

Samples were collected through the cyclone at 1.5m intervals and the rods and cyclone were cleaned

with compressed air after every run.

The RC drilling technique was chosen because RC drilling could drill deeper holes than auger drilling. In

addition, because of its higher power, RC drilling can drill through wet material and has a better

recovery percentage than auger drilling, which is prone to losing wet samples through its spiral.

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7.5 Crown

A total of 44 RC drill holes at approximately 200m-by-200m average grid were completed in 2017 on

Crown Complex as shown in Figure 7.1Figure 7.8.

Figure 7.1: Crown Complex: Map showing drill hole Locations

Source: The RVN Group, 2022

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7.6 City Deep

A total of 27 auger drill holes between 100m and 200m spacing were completed in 2017 on the City

Deep Complex, as shown in Figure 7.2.

Figure 7.2: City Deep Complex: Map showing Drill Hole Locations

Source: The RVN Group, 2022

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45

7.7 Knights

7.7.1 4L14

A total of 17 auger drill holes were completed on 4L14. The average drill hole spacing was 100m. Drill

holes are well spread throughout the TSF as presented in Figure 7.3.The TSF has a maximum height of

37.5m. The intersected soil reported higher gold values; thus, the soil was modelled as a separate

domain and added to the TSF’s Mineral Resource.

Figure 7.3: Knights Complex - 4L14: Map showing Drill Hole Locations

Source: The RVN Group, 2022

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7.7.2 4L50

A total of 22 auger drill holes were completed on 4L50. The average drill hole spacing is between 50m

and 100m. Drill holes are well spread throughout the TSF (Figure 7.4). The TSF has a maximum height of

40m. The average gold grade is 0.26g/t. Mining is ongoing on this TSF.

Figure 7.4: Knights Complex - 4L50: Map showing Drill Hole Locations

Source: The RVN Group, 2022

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7.8 Ergo

7.8.1 7L15

A total of 22 auger drill holes were completed on 7L15. Some holes were twin holes to confirm the results

obtained in previous drilling campaigns. The drill hole pattern has an irregular spacing averaging less

than 100m (Figure 7.5).

Figure 7.5: Ergo Complex - 7L15: Map showing Drill Hole Locations

Source: The RVN Group, 2022

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7.8.2 Rooikraal

A total of 64 RC drill holes were completed on Rooikraal. Irregular drill hole spacing was due to access

challenges (Figure 7.6). An average drill hole spacing of less than 100m was achieved.

Figure 7.6: Ergo Complex - Rooikraal: Map showing Drill Hole Locations

Source: The RVN Group, 2022

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7.9 Marievale

A drill hole map for the Marievale complex is presented in Figure 7.7. Average spacing of 100m was

followed. Auger drilling was done in 2020.

Figure 7.7: Marievale Complex: Map showing Drill Hole Locations

Source: The RVN Group, 2022

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7.10 Grootvlei Complex

A total of 34, 31 and 39 drill holes were completed on 6L16, 6L17 and 6L17A respectively, as shown in

Figure 7.8, Figure 7.9 and Figure 7.10. Drill holes completed in 2016 were a combination of auger and

RC techniques. All previous campaigns (2008 and 2015) used the auger drilling technique. The grid

spacing for 6L16 is approximately 200m-by-200m while 6L17 and 6L17A have a closer drill hole spacing

of approximately 100m-by-100m.

Figure 7.8: Grootvlei Complex - 6L16: Map showing Drill Hole Locations

Source: The RVN Group, 2022

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Figure 7.9: Grootvlei Complex - 6L17: Map showing Drill Hole Locations

Source: The RVN Group, 2022

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Figure 7.10: Grootvlei Complex - 6L17A: Map showing Drill Hole Locations

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

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7.11 5A10/5L27

A total of 30 drill holes were completed on the 5A10/5L27 sand dumps in 2017. All drill holes were drilled

using the auger drilling technique. An irregular spacing of between 50m and 100m was followed. Due

to the high height of the sand dump, all holes drilled on top of the middle dump did not intersect the

base of the TSF (red color in Figure 7.11). Mining is ongoing on this sand dump.

Figure 7.11: 5A10/5L27: Map showing Drill Hole Locations

Source: The RVN Group, 2022

The deepest drilled hole was 52.5m. This drill hole did not intersect the base or soil. The auger drill machine

could not drill deeper because the holes collapse at depths, due to auger drilling constraints. The RVN

Group geologists stopped drilling once they noticed that the hole had collapsed, so as to ensure that

only good-quality representative samples were obtain ed.

Technical Report Summary of the material Tailings Storage Facilities

54

7.12 Daggafontein TSF

A total of 55 drill holes were drilled on Daggafontein TSF from 2017 to 2021 as shown in Figure 7.12. The

center of the TSF (outlined with a dotted line) could not be accessed for drilling due to the presence of

surface water. Figure 7.12 presents the evaluation drilling information for the different drilling campaigns.

Only two drill holes were completed in 2017 which were drilled far apart. Drilling campaigns completed

from 2018 to 2021 were drilled to infill the drill space to confirm the continuity of mineralization. On

average, the drill holes were spaced at a nominal grid of 200m-by-200m and were well spread to ensure

that the samples were representative of the TSF.

Figure 7.12: Daggafontein Complex - Daggafontein TSF: Map showing Drill Hole Locations

Source: The RVN Group, 2022

7.13 Logging and Sampling

The RVN Group used comprehensive logging and sampling standard procedures, including extensive

Quality Assurance (QA)and Quality Control (QC) procedures. In addition, the geologist and drilling

supervisor count ed the rods after each hole had intersected the soil to confirm the borehole depths.

Where samples were split, quartering was done by the geologist on-site to ensure the representativity of

these samples.

The samples were assigned unique sample identification numbers and tagged before being submitted

to the laboratory. In addition, for each sample batch, QC samples were submitted to the laboratory.

Technical Report Summary of the material Tailings Storage Facilities

55

The RVN Group geologists prepared sample submission sheets that accompanied the samples. Records

of the sample data were captured in a database.

The RVN Group monitored the drilling and sampling process. Logging was qualitative in nature, except

for sample intervals. All drill holes were logged in entirety from top to bottom on-site.

As drilling progressed, the spiral for auger and rods for RC drilling were cleaned after every drilling run to

prevent sample contamination.

7.13.1 Logging

Drill holes were logged on-site by The RVN Group geologist using the individual 1.5m samples taken

throughout the drill hole. Samples were classified according to whether they were slimes or soil, moist or

wet and on color.

Logging was done on-site as hard copy handwritten logs, then later captured electronically into

Microsoft Excel.

7.13.2 Sampling

Every drill hole was sampled at 1.5m intervals for the entire length of the hole. The samples were

immediately bagged and tagged on site. Sampling (plastic) bags were labelled and tagged with a

sample book tag. The drill log and sample book were regularly checked against the drill hole depth as

drilling proceeded so as to ensure compatibility.

Samples were noted as “dry”, “moist” or “wet” in the drill log and sample book.

The responsible geologist planned sample numbers and the QC samples in a Microsoft Excel

spreadsheet and assigned them to the appropriate sample interval.

The RVN Group safely and carefully collected, secured and transported the samples from the site so as

to avoid contamination and sample loss.

All the samples were presented to the laboratory in a well-organized and sorted manner with easily

understandable documentation, including a fully completed Sample Submission Form.

7.14 Sample Recovery

Samples recovered from the TSFs and sand dump material were mostly moist and fine-grained. The

sample size was visually checked on-site to ensure they were of a similar size and sufficient quantity. The

gold grade did not show a definable relationship with sample weights. The QP considered the recovery

and sample quality satisfactory for further evaluation.

7.15 On-site Security Measures

Access to the drill sites was restricted to the drilling and The RVN Group teams. Any unauthorized access

to the drill sites was prohibited. Drilling sites were demarcated by danger tape and no visitors could cross

the demarcated area unless authorized by the QP. Once samples were packed and the bags closed,

no one was allowed to open the bags.

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7.16 Collar Survey Data

A qualified surveyor from Geografix surveyed the drill hole collar positions using total station surveying

equipment and differential GPS instruments. The accuracy of the method was within a 10cm range.

Collar positions were plotted on the satellite images to verify positions and collars plots were inspected.

Elevations were compared to the topographic survey. Collar positions were verified to be accurate.

The QP is satisfied with the surveying methodology followed. The surveys were performed by a qualified

surveyor who has sufficient experience to undertake the task. The surveys were considered to be of

adequate quality for use in the evaluations of the TSFs.

No downhole survey measurements were taken as the drill holes were shallow and vertical, and the QP

anticipated no deviations.

7.17 Density Determination

Bulk densities on the TSFs were measured in situ by Letsatsi Materials Engineering (Proprietary) Limited (a

South African National Accreditation System (SANAS) accredited institution for engineering materials

testing) using a Troxler densitometer between September 2020 and January 2021. The bulk density

measurements included compaction rates and moisture content. The use of densitometers on TSFs and

sand dumps is common practice, as TSFs and sand dumps are engineered features with consistent

physical properties. The density of the TSF is directly proportional to the compaction rate and material

property. As the moisture content increases, density decreases and vice versa. The compaction rate

and material property do not vary significantly with depth (TSFs and sand dumps are largely

homogeneous); thus, measurements taken at any depth (>10cm) are representative of the TSF and

sand dump compartments.

Density measurement points were prepared and measurements were taken per TSF or sand dump. The

points were well spread. Preparation of points involved removing the topmost 5cm to 10cm of loose

material and flattening (levelling) the surface. Measurements were taken at 150mm and 300mm depths

per point. As part of quality control, some points are measured more than once.

The statistics of the density measurements are presented in Table 7.2.

The average bulk densities determined for the TSFs or sand dump were slightly higher than the 1.42t/m

3

that Ergo uses for the TSFs or sand dump they are mining.

The mean tests showed that the density is more than 1.42t/m

3

with a 95% confidence level. Confidence

intervals for the densities indicated, with a 95% confidence level, that the mean density applied at Ergo

is within the range. The QP decided to continue using a lower mean density of 1.42t/m

3

 as it is within the

95% confidence and prediction intervals, passed the mean test. In addition, Ergo has been successfully

applying 1.42t/m

3

 in their mining production reconciliation for more than 15 years.

The QP is satisfied using a 1.42t/m

3

 mean dry bulk density for all the TSFs and sand dumps with the

understanding of the upside potential if the mean density is later determined to be higher.

Technical Report Summary of the material Tailings Storage Facilities

57

Table 7.2: Bulk Density Information and Statistics

Reclamation Site

TSF/Sand Dump

Number

of

Samples

Mean Density

(t/m

3

)

Standard Deviation

(t/m

3

)

Minimum

(t/m

3

)

Maximum

(t/m

3

)

CoV***

Crown Complex

3L5

60

1.479

0.044

1.353

1.567

0.03

3L7

60

1.443

0.020

1.381

1.485

0.01

3L8

32

1.397

0.028

1.331

1.440

0.02

City Deep Complex

4L3

20

1.419

0.078

1.214

1.560

0.05

4L4

20

1.456

0.031

1.410

1.522

0.02

4L6*

-

-

-

-

-

-

Knights Complex

4L14*

-

-

-

-

-

-

4L50

30

1.624

0.040

1.531

1.711

0.02

Ergo Complex

7L15

30

1.513

0.035

1.443

1.591

0.02

Rooikraal

90

1.457

0.051

1.350

1.602

0.04

Marievale Complex

7L4

60

1.457

0.033

1.405

1.526

0.02

7L5

30

1.434

0.047

1.360

1.520

0.03

7L6

60

1.453

0.060

1.335

1.595

0.04

7L7

60

1.461

0.032

1.374

1.548

0.02

Grootvlei Complex

6L16

60

1.543

0.060

1.384

1.643

0.04

6L17

59

1.499

0.038

1.420

1.592

0.03

6L17A

58

1.490

0.044

1.402

1.606

0.03

5A10/5L27 Sand

Dumps

5A10/5L27

30

1.529

0.037

1.468

1.596

0.02

Daggafontein TSF

Daggafontein

58

1.511

0.058

1.394

1.687

0.04

Total

817

1.480**

0.043

1.214

1.711

0.03

Source: The RVN Group, 2022

*no measurements were taken due to access problems

**weighted average

***CoV is the abbreviation for Coefficient of Variation

Technical Report Summary of the material Tailings Storage Facilities

58

7.18 Hydrological Drilling and Test Work

No hydrogeological studies were completed.

However, some relevant hydrological data was captured during drilling and logging by The RVN Group.

The RVN Group logs have moisture content recorded (i.e., dry, moist, wet or watery). Additionally, Ergo

installed piezometers in some larger TSFs (Crown Complex and Daggafontein TSF) to monitor water

levels. Smaller TSFs are considered low risks as they are dormant and mostly moist to dry; thus, no

piezometers were installed.

7.18.1 Crown Complex

The QP has classified the GMTS TSF as moist to wet and Diepkloof and Mooifontein TSFs are classified as

dry to moist (Table 7.3, Table 7.4 and Table 7.5).

Table 7.3: GMTS (3L8) Moisture Content

Average Depth

Moisture Content Commentary

From

(m)

To

(m)

0.0

27.0

Dry

27.0

54.0

Moist

54.0

58.5

Wet

58.5

61.5

Watery

61.5

64.5

Wet

64.5

67.5

Watery

67.5

The Base of the TSF

Wet

The Base of the TSF

Soil

Moist

Source: The RVN Group, 2022

Table 7.4: Diepkloof (3L5) Moisture Content

Average Depth

Moisture Content Commentary

From

(m)

To

(m)

0.0

21.0

Dry

21.0

45.0

Moist

45.0

The Base of the TSF

Wet

The Base of the TSF

Soil

Moist

Source: The RVN Group, 2022

Table 7.5: Mooifontein (3L7) Moisture Content

Average Depth

Moisture Content Commentary

From

(m)

To

(m)

0.0

30.5

Dry

30.5

36.0

Moist

36.0

The Base of the TSF

Wet

The Base of the TSF

Soil

Moist

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

59

7.18.2 City Deep Complex

The QP classified the City Deep Complex as moist (Table 7.6, Table 7.7 and Table 7.8).

Table 7.6: 4L3 Moisture Content

Average Depth

Moisture Content Commentary

From (m)

To (m)

0.0

31.5

Moist

31.5

The Base of the TSF

Wet

The Base of the TSF

Soil

Moist

Source: The RVN Group, 2022

Table 7.7: 4L4 Moisture Content

Average Depth

Moisture Content Commentary

From

(m)

To

(m)

0.0

The Base of the TSF

Moist

The Base of the TSF

Soil

Moist

Source: The RVN Group, 2022

Table 7.8: 4L6 Moisture Content

Average Depth

Moisture Content Commentary

From

(m)

To

(m)

0.0

13.5

Moist

13.5

The Base of the TSF

Wet

The Base of the TSF

Soil

Moist

Source: The RVN Group, 2022

7.18.3 Knights Complex

The QP classified the Knights TSFs as moist (Table 7.9 and Table 7.10).

Table 7.9: 4L14 Moisture Content

Average Depth

Moisture Content Commentary

From

(m)

To

(m)

0.0

4.5

Dry

4.5

12.0

Moist 

12.0

25.0

Wet

25.0

30.0

Moist

30.0

The Base of the TSF

Wet

The Base of the TSF

Soil

Moist

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

60

Table 7.10: 4L50 Moisture Content

Average Depth

Moisture Content Commentary

From

(m)

To

(m)

0.0

16.5

Moist

16.5

The Base of the TSF

Wet

The Base of the TSF

Soil

Moist

Source: The RVN Group, 2022

7.18.4 Ergo Complex

The QP classified the Rooikraal TSF as moist to wet (Table 7.11 to Table 7.12). The TSF is moist to wet

because it is situated closer to the wetland. The 7L15 TSF is moist.

Table 7.11: Rooikraal Moisture Content

Average Depth

Moisture Content Commentary

From

(m)

To

(m)

0.0

12.0

Moist 

12.0

13.5

Dry

13.5

22.5

Wet

22.5

The Base of the TSF 

Watery

The Base of the TSF

Soil

Moist

Source: The RVN Group, 2022

Table 7.12: 7L15 Moisture Content

Average Depth

Moisture Content Commentary

From

(m)

To

(m)

0.0

19.5

Moist

19.5

The Base of the TSF

Wet

The Base of the TSF

Soil

Moist

Source: The RVN Group, 2022

7.18.5 Marievale Complex

The QP classified the Marievale TSFs as moist to wet (Table 7.13, Table 7.14, Table 7.15 and Table 7.16).

The TSF is moist to wet because it is situated closer to the Blesbokspruit. All TSFs are east of the

Blesbokspruit.

Table 7.13: 7L4: Moisture Content

Average Depth

Moisture Content Commentary

From

(m)

To

(m)

0.0

6.0

Moist

6.0

10.5

Wet

10.5

The Base of the TSF

Watery

The Base of the TSF

Soil

Moist

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

61

Table 7.14: 7L5: Moisture Content

Average Depth

Moisture Content Commentary

From

(m)

To

(m)

0.0

1.5

Dry

1.5

12.0

Moist

12.0

The Base of the TSF

Wet

The Base of the TSF

Soil

Moist

Source: The RVN Group, 2022

Table 7.15: 7L6: Moisture Content

Average Depth

Moisture Content Commentary

From

(m)

To

(m)

0.0

4.5

Dry

4.5

15.0

Moist

15.0

The Base of the TSF

Wet

The Base of the TSF

Soil

Moist

Source: The RVN Group, 2022

Table 7.16: 7L7: Moisture Content

Average Depth

Moisture Content Commentary

From

(m)

To

(m)

0.0

6.0

Dry

6.0

10.5

Moist

10.5

The Base of the TSF

Wet

The Base of the TSF

Soil

Moist

Source: The RVN Group, 2022

7.18.6 Grootvlei Complex

The QP classified the Grootvlei TSFs as wet (Table 7.17, Table 7.18 and Table 7.19). The TSFs are wet

because they are situated closer to the Blesbokspruit wetland area. The 6L17 and 6L17A TSFs are east of

the Blesbokspruit, while the 6L16 TSF is located to the west.

Table 7.17: 6L16 Moisture Content

Average Depth

Moisture Content Commentary

From

(m)

To

(m)

0.0

7.5

Moist 

7.5

24.5

Wet

24.5

The Base of the TSF 

Watery

The Base of the TSF

Soil

Moist

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

62

Table 7.18: 6L17 Moisture Content

Average Depth

Moisture Content Commentary

From

(m)

To

(m)

0.0

4.5

Dry

4.5

18.0

Moist

18.0

The Base of the TSF

Wet

The Base of the TSF

Soil

Moist

Source: The RVN Group, 2022

Table 7.19: 6L17A Moisture Content

Average Depth

Moisture Content Commentary

From

(m)

To

(m)

0.0

13.5

Dry

13.5

The Base of the TSF

Wet

The Base of the TSF

Soil

Moist

Source: The RVN Group, 2022

7.18.7 5A10/5L27

The QP classified the 5A10/5L27 sand dumps as moist to dry sand dumps. This is because courser grained

sand does not trap water like the finer grained tailings slime (Table 7.20).

Table 7.20: 5A10/5L27 Moisture Content

Average Depth

Moisture Content Commentary

From

(m)

To

(m)

0.0

The Base of the TSF

Moist

The Base of the TSF

Soil

Moist

Source: The RVN Group, 2022

7.18.8 Daggafontein TSF

Daggafontein TSF has water on the surface. The QP classified it as wet. It was estimated that at least

one million cubic meters of water are on top of Daggafontein TSF (Table 7.21).

Table 7.21: Daggafontein Moisture Content

Average Depth

Moisture Content Commentary

From

(m)

To

(m)

0.0

12.0

Dry

12.0

16.0

Moist

16.0

19.5

Wet

19.5

30.0

Watery

30.0

The Base of the TSF 

Wet

The Base of the TSF

Soil

Moist

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

63

7.19 Geotechnical Data, Testing and Analysis

No geotechnical testing and sampling were completed on the TSFs and sand dumps.

However, stability assessment studies were completed on the TSFs with a greater than 60Mt Mineral

Resource. In 2019, stability assessments were conducted on Daggafontein TSF and Crown Complex TSFs

by Lutails Engineering (Proprietary) Limited. No studies were completed on other the TSFs or sand dumps

as they are small, dormant) and pose a low geotechnical stability risk.

The following were observed on the Daggafontein TSF:

●

there was no seepage anywhere around the toe of the TSF;

●

some of the catchment paddocks, where they still exist, are quite silted and should be cleaned

or re-shaped during a rehabilitation process; 

●

the filter drains were mostly open but in need of jet-rodding to remove sedimentation; and 

●

there was water visible on the top surface.

On the Crown Complex TSFs, the following conclusions were made:

●

there are adequate controls on the TSFs to prevent stormwater damage, with no significant

spillages having occurred over the past few years;

●

the potential for wind-blown dust has been ameliorated through ridge ploughing of the basins

and due to the presence of well-established vegetation;

●

vegetation has been established on most side slopes thereby reducing water and wind erosion.

There have been no reports of significant spillages from the Crown Complex over the past few

years;

●

most of the filter drain outlets are no longer operational, and recorded drain flow is therefore

only a fraction of what it was. Despite the outlet pipe losses, the is very little evidence of seepage

from the toe of the TSF; and

●

most of the standpipe piezometers are no longer operational. Those remaining show a drop in

piezometric levels, albeit it less than reasonably expected.

Hydrogeological advice is obtained prior to mining activities as the combination of high moisture

content and fine particles could, during mining activities, result in liquefaction and mud rush conditions.

A risk assessment is undertaken when commencing mining of a TSFs or sand dump to avoid slope failures.

Ergo and their mining contractors have procedures to ensure safe mining and loading of TSFs and sand

dumps which can be as high as 70m.

Ergo had not reported any significant slope failures associated with the retreatment operations of their

TSFs or sand dumps in the past 15 years.

The QP is satisfied that the stability studies of the TSFs are sufficient and meet the requirements for the

intended purpose.

Technical Report Summary of the material Tailings Storage Facilities

64

8 Sample Preparation, Analyses and Security

8.1 Sampling Governance and Quality Assurance

The RVN Group used its standard procedures for data collection, analysis, validation and storage. In

addition, regular planned task observations of procedures and their implementations are undertaken

to ensure compliance and appropriateness for the drilling program. Training and planned task

observations are provided by the QP.

The sample chain of custody is managed by experienced geologists from The RVN Group.

The QP is satisfied with the QA and QC protocols in place.

8.2 Sample Preparation and Analysis

8.2.1 On-site Sample Preparation

All samples were halved on-site by a geologist through the cone and quartering method as the samples

were too moist or wet to use a riffle splitter, which has the potential to introduce cross-contamination

and bias. The cone and quartering method does not introduce a systematic bias as it involves pouring

each sample on a clean, flattened bag (1.0m-by-0.5m).

The quartering method is considered appropriate for the TSF material as TSF samples are homogeneous

due to the deposition procedure. Figure 8.1 shows the cone and quartering methodology followed.

One half is for the metallurgical test and the other half is for a routine exploration sample.

Figure 8.1: Cone and Quartering Method

Source: Modified after Alakangas, 2015

Technical Report Summary of the material Tailings Storage Facilities

65

Sorting of samples took place on the TSFs and at the storage site at Ergo.

Where a field duplicate was required, a selected routine exploration sample underwent a further

quartering process.

To maintain validity and integrity of samples and as part of security measures, only geologists worked

on the samples, and samples were sealed immediately after preparation.

8.2.2 Laboratories, Sample Preparation and Analyses

The samples were sent to the following three reputable laboratories for further preparation and assaying:

●

MAED at Ergo’s Plant in Brakpan: The facility is not accredited but it is the laboratory used by

Ergo for its grade control and daily plant samples. MAED is not owned by Ergo, although it is

situated in the Ergo Plant and was supplied with all routine exploration samples for analysis;

●

SGS in Randfontein: SGS is a SANAS accredited facility (T0265) and has been used for the

selected analytical method. Randomly selected check samples (approximately 10% of the total

samples) from MAED were sent to SGS for confirmation. SGS is independent of Ergo; and

●

AngloGold Ashanti Limited Chemical Laboratory (Anglo Lab) in Carletonville: Anglo Lab

analyzed some check samples for 7L15 TSF in 2016 and 2017 as a secondary laboratory to MAED.

The laboratory no longer exists and it was not SANAS accredited. The laboratory was

independent of Ergo.

Technical Report Summary of the material Tailings Storage Facilities

66

Table 8.1 presents information about where the samples were analyzed.

Table 8.1: Laboratories Used

TSF/Sand Dump

Primary Laboratory

Secondary Laboratory

Crown Complex

3L5

MAED

3L7

MAED

3L8

MAED

City Deep Complex

4L3

MAED

SGS

4L5

MAED

4L6

MAED

Knights Complex

4L14

MAED

SGS

4L50

MAED

SGS

Ergo Complex

Rooikraal

MAED

SGS

7L15

MAED

SGS and Anglo Lab

Marievale Complex

7L4

MAED

7L5

MAED

7L6

MAED

7L7

MAED

Grootvlei Complex

6L16

MAED

SGS

6L17

MAED

SGS

6L17A

MAED

SGS

5A10/5L27 Sand Dump

5A10/5L27

MAED

Daggafontein Complex

Daggafontein

MAED

SGS

Source: The RVN Group, 2022

The laboratories sorted and weighed samples on receipts, conducted dry screening to remove foreign

material. Subsequently, the samples were dried at 105

˚

C, then crushed to 80% passing 2mm, riffle split

and finally pulverized to 75µm before being analyzed.

The selected laboratories follow analytical procedures that are conventional industry practice.

The samples were analyzed for gold by fire assay with gravimetric finish by MAED and Atomic Absorption

Spectroscopy (AAS) finish by SGS and Anglo Lab. These methods are conventional and have been used

for more than 50 years with minor adjustments. The methods have a lower detection limit of 0.01g/t Au

and there is no upper detection limit for gravimetric finish. The AAS has a 10g/t Au upper limit. The lower

limit is relevant to the TSFs and sand dumps. The TSFs and sand dumps are processed materials and are

generally low-grade materials with slightly higher grades than ten times the detection limit.

The laboratories were instructed to use a 100g aliquot to analyze for gold. Through experience, it is

known that to analyze for gold in low-grade slimes, anything less than a 100g aliquot may report less

accurate results.

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8.2.3 QP Opinion

The QP is satisfied with the sample preparation, analytical methods and level of cleanliness at the

analytical laboratories. The analytical techniques employed are suited to the mineralization style and

expected grades. The techniques meet the requirements for the intended use.

8.3 Analytical Quality Control

8.3.1 Nature and Extent of the Quality Control Procedures

A comprehensive QC program comprising reference material, duplicates and commercially sourced

certified blanks were inserted by The RVN Group in a random but stratified manner, at frequencies

targeting

±

10% coverage of all samples. The QC program identifies various aspects of the results that

could negatively influence the subsequent evaluation processes. The QC samples were used to monitor

the sampling, sample preparation and analytical processes. Analysis of QC data is performed to assess

the reliability of all sample assay data and the confidence in the data used for Mineral Resource

estimation.

All QC sample insertions maintained consecutive numerical order. These control samples were inserted

as part of a continuous sample number sequence and the QC samples were not obviously different

from routine samples when the milled material was prepared and analyzed. Applying the QC process,

it was possible to identify samples that have been swapped, gone missing or incorrectly labelled

amongst other aspects.

QC samples were sourced from African Mineral Standards (AMIS) based in Modderfontein,

Johannesburg.

The RVN Group ensured that all standards and blanks were stored in sealed containers and

considerable care was taken to ensure that they were not contaminated in any manner (i.e., through

storage in a dusty environment or being placed in a contaminated sample bag, etc.).

Field duplicates were prepared on-site as the TSF material was already loose and fine-grained.

The QC set of samples consisted of:

●

the certified silica blanks (AMIS0484) from AMIS;

●

certified reference materials (CRMs) (AMIS0647 with 0.17g/t Au, AMIS0299 with 0.36g/t Au,

AMIS0515 with 0.51g/t Au) from AMIS;

●

standard reference material L-AU015 and L-AU16 with an average value of 0.20g/t Au and

0.30g/t Au, respectively . Standard reference materials with the averages of 0.22g/t Au, 0.33g/t

Au and 0.74g/t Au were also used; and

●

field duplicates (prepared through the cone and quartering technique discussed in Item 8.2.1).

From 2021, only CRM were used and the use of inhouse standard reference material was discontinued

as inhouse standards performance was not always consistent. The QP noted that this does not imply

that the previous results were of low quality as rigorous quality control assessments were implemented.

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68

The new procedure of using only CRM with a matched matrix was implemented because the CRMs

come with defined certified values and are easier to monitor.

8.3.2 Quality Control Results

Analytical results for the blank and standards are analyzed graphically on control charts to facilitate the

identification of anomalous data points. A sufficient number of standards and blanks are inserted into

the sample stream. If the standard result is reported outside three standard deviations of the certificate

value

–

 a re-assay would be requested for the whole batch from the laboratory.

8.3.3 QP Opinion

In the QP’s opinion, the QC samples covered a reasonable range of grades with respect to the overall

resource grades and no significant bias was observed. The laboratories’ analytical data shows overall

acceptable precision and accuracy and no evidence of overwhelming contamination by the

laboratory that would affect the integrity of the data. As a result, the analytical data from the

laboratories is of acceptable integrity and can be relied upon for TSF and sand dump grade estimation.

8.4 Sample Storage and Security

Samples were stored at the Archive Store at Ergo’s processing plant in Brakpan. The storage facility is

always locked and has an electric fence to prevent unauthorized entry. Sample rejects and pulps are

stored for six months after all assays are received from the laboratory and then discarded.

8.5 Data Storage and Database Management

Procedures are in place to ensure the accuracy and security of the databases.

Laboratories reported results in Microsoft Excel and .pdf formats. The RVN Group copied and pasted the

results into the database. Spot checks were randomly performed to identify copying and pasting errors.

The RVN Group created and validated the database on behalf of Ergo. The database was developed

and validated in Microsoft Excel. The database was sent to Ergo for further use and storage.

The RVN Group compiled the following key digital databases:

●

a drill hole database that includes collar location, assay and geology data;

●

assay quality control data;

●

density data; and

●

process samples information.

The QP is satisfied with data storage and validation . Database management practices adhere to best

practice. The QP is of the opinion that the databases are a fair and accurate record of all drill hole and

assay data.

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69

The RVN Group has saved the information, including the databases, in the cloud as a backup, in line

with the latest technological developments. Additionally, data is stored on external hard drives placed

in different locations. The RVN Group has provided sufficient provisions to ensure the security and

integrity of the data stored in the databases.

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9 Data Verification

Post-2016:

The QP performed verifications of the data collected. The QP experienced no limitations to

the review, analysis and verification of data.

The QP did compare a selection of the hardcopy logs with the drill holes database and the logs and

database match. The collars were checked by comparing the collars with the topography surface from

the surveyor. Collars were also plotted on Google Earth Pro for confirmation. The collars were accurate.

Logging, surveying and sampling were monitored by the exploration geologists and verified routinely

for consistency. The RVN Group geologists regularly maintain and validate the databases using

validation routines and regularly check the drill hole data visually on-screen. A first check consists of

identifying duplicate sample numbers or lack of sample information. Paper records are stored in a safe

location at Ergo’s Offices.

The QP is of the opinion that the data collection, import and validation workflows are consistent with

industry standards and are of sufficient quality to support the Mineral Resource estimation.

The QP has taken a number of steps to verify the Mineral Resource estimates, including assumptions and

inputs into the estimate and the estimation process itself. The QP checked the volume, density and

grade with the Mineral Resource QP along with the mine planning specialist, noting that based on

historical information, no dilution or mining loss is applied to the Mineral Resource.

The QP conducts quarterly reconciliations of Run-of-Mine (RoM) grade, tonnage, recovery

(metallurgical assumptions) and other modifying factors from the ongoing mining operations to

demonstrate that the modifying factors applied to the mine plan are as predicted by the geological

block model.

Actual performance for operational mining areas provides a high level of confidence where similar

performance can be expected from future mining areas. The current Mineral Reserves have not

demonstrated any material differences in the planned and actual modifying factors. The QP is of the

opinion that the data used to estimate the Mineral Reserve is adequate.

Historical:

Sampling and assaying of the TSFs and sand dumps prior to 2016 is essentially the same as the

current work. The only real change noted by the QP is that the sieve size was reduced to 850µm in 2016,

where it was 1,000µm previously. Currently, there is no apparent difference between the results using

these different sieve sizes.

The analytical method is fire assay, a well-established technique used in the South African gold mines.

The methods differed slightly over time and between laboratories, but the results are consistent within a

TSF. Aliquot sizes have been either 100g or 125g, depending on the laboratory used.

Quality control systems are in place in laboratories to monitor accuracy and precision.

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71

10 Mineral Processing and Metallurgical Testing

10.1 Nature and Extent of the Metallurgical Testing Method

Samples were received from the various drilling exercises in 1.5m increments for each hole. Typically,

composites were made over a 15m horizon as this corresponds with the monitoring/mining depth. The

TSFs and sand dumps were generally divided into a top, middle and bottom horizon, depending on the

height of the TSF or sand dump. In the plans, the TSFs were also divided into areas giving distinct domain

samples for metallurgical test work.

10.2 Procedure

10.2.1 Slime Material

The individual samples were split in two using a blending mat, and cone and quartering methods. The

one half was returned to the sample bag for possible future use and for reference. The other half was

composited as per the areas/horizons or domain alluded to earlier. The composite was well mixed and

sub-samples taken for test work at Ergo Metallurgical Research or at the Maelgwyn South Africa

(Proprietary) Limited’s laboratory.

The proposed processing route for all TSF and sand dump material is hydraulic mining, cyaniding in a

Carbon-in-Leach (CIL) circuit, with the tailings deposited onto another TSF, and then carbon eluted for

gold recovery before being recycled back to the leach.

A standard bottle roll test was done on each composite using the following leaching parameters:

●

samples slurried to a density of 1.45;

●

screened to remove +850µm discard material;

●

head sample was taken for triplicate fire assay;

●

pre-conditioning with lime for one hour to stable pH of 10.5;

●

cyanide added at 0.35kg/t;

●

activated carbon added at 20g/l;

●

leach terminated after seven hours;

●

solids filtered and washed twice and solutions tested for residual reagents and gold content;

●

residue assays done in triplicate.

10.2.2 Sand Material

Metallurgical test work was conducted on 5A10/5L27 sand dump drilling samples. The objective of the

test work was to validate the gold grades received from the Mineral Resource Management (MRM)

Department, assess the milling requirements and evaluate the leach kinetics/characteristics of the

material. The dump was partitioned into four sections. The average gold grade received from the MRM

Department for Section 1 was 0.62g/t, Section 2 was 0.30g/t, Section 3 was 0.51g/t and Section 4 was

Technical Report Summary of the material Tailings Storage Facilities

72

0.41g/t. The average gold grade obtained from metallurgical research test work for Section 1 was

0.62g/t, Section 2 was 0.30g/t, Section 3 was 0.51g/t and Section 4 was 0.39g/t.

The samples were milled over varying durations and milling curves plotted to determine the optimum

milling time. The milling curves indicate that the optimum milling duration achieving at least 60% -75µm

is 2.5 hours for Section 1 and 2 hours for Sections 2, 3 and 4. Leach tests were then conducted on the

milled product and the results confirm that gold yield increases with increased milling time.

The respective 5A10 material responds well to cyanide leach as desired dissolution of 60% was attained

for all Sections at the above milling durations. Preg-robbing tests were also conducted on material from

Sections 1 and 3 and the results indicate that there is no significant preg-robbing.

10.3 Representative of the Samples

Drill holes were drilled on a defined grid down to the soil. The samples received were correctly split and

composited, and are considered to be representative of the various volumes within the TSFs.

10.4 Details of the Laboratories

The Ergo Metallurgical Research Laboratory, located in Brakpan inside the Ergo processing plant, is

geared to perform bottle roll testing on a routine basis with skilled technicians. Internal accounting

checks are undertaken to ensure the accuracy of the work done. The laboratory is not accredited and

is the internal test facility for Ergo. The laboratory is not independent of Ergo.

The Maelgwyn South Africa (Proprietary) Limited (Maelgwyn) laboratory, situated in Roodepoort, is

accredited for International Organization for Standardization (ISO 9001:2025) to perform gold leaching

test work with their assays analysis conducted by the SGS laboratory , in Randfontein. SGS is an SANAS

accredited facility (T0265) for gold analysis.

Both the Maelgwyn and SGS laboratories are independent of Ergo.

10.5 Results

The main assumption was that the laboratory procedure emulates the processing plant and historically

this has been shown to be a fair assumption. To accommodate the dissolved loss encountered in the

processing plant, an allowance of 0.008g/t Au is made to calculate the predicted recovery in the plant.

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73

Table 10.1 presents the results of metallurgical test work.

Table 10.1: Summary of Predicted Ergo Processing Plant Performance

TSF/Sand Dump

Head Au

(g/t)

Washed

Residue Au

(g/t)

Dissolution

Loss Au

(g/t)

Recovery

(%)

Analysis Laboratory

Crown Complex

3L8 (GMTS)

0.25

0.14

0.008

41

Ergo

3L7 (Mooifontein)

0.23

0.13

0.008

40

Ergo

3L5 (Diepkloof )

0.23

0.14

0.008

36

Ergo

City Deep Complex

4L3

0.32

0.12

0.008

60

Ergo

4L4

0.37

0.21

0.008

41

Ergo

4L6

0.31

0.12

0.008

58

Ergo

Knights Complex

4L14

0.28

0.15

0.008

44

Maelgwyn/Ergo

Ergo Complex

4L50

0.26

0.16

0.008

35

Maelgwyn/Ergo

Rooikraal

0.25

0.17

0.008

31

Ergo

7L15

0.28

0.14

0.008

47

Maelgwyn/Ergo

Marievale Complex

7L4

0.29

0.13

0.008

52

Ergo

7L5

0.30

0.19

0.008

34

Ergo

7L6

0.24

0.16

0.008

30

Ergo

7L7

0.34

0.2

0.008

39

Ergo

Grootvlei Complex

6L16

0.25

0.17

0.008

33

Maelgwyn/Ergo

6L17

0.26

0.13

0.008

47

Maelgwyn/Ergo

6L17A

0.26

0.15

0.008

39

Maelgwyn/Ergo

5A10/5L27 Sand Dumps

5A10/5L27

0.49

0.21

0.008

60

Ergo

Daggafontein TSF

Daggafontein

0.25

0.16

0.008

35

Ergo

Source: DRDGOLD, 2022

10.6 Interpretation of the Results

Table 10.1 summarizes the metallurgical test work that has been done on the various TSFs and sand

dumps. In the table under the ‘comments’ column, an indication as to which laboratories carried out

the test work is given. The head grade and washed residue are the results achieved in the laboratory.

In order to predict how the material would respond to treatment in the Ergo processing plant, a dissolved

gold loss of 0.008g/t Au has been applied. In general, the head grades vary between 0.25g/t Au and

0.32g/t Au. The response to cyanidation is varied which could be due to numerous factors.

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74

10.7 QP Opinion

In the opinion of the QP, data derived from metallurgical test work is adequate for designing processing

facilities and techniques, and provides suitable grade and recovery predictions for use in the LoM plans.

Confidence is further increased by processing plant performance demonstrated through reconciliation

for over ten years.

The metallurgical process is well tested and utilized by numerous tailings retreatment operators in South

Africa and elsewhere. There were no processing factors or deleterious elements that could significantly

affect potential economic extraction.

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75

11 Mineral Resource Estimates

The gold grade estimation was completed using two modelling techniques: Inverse Distance Weighting

(IDW) to the power of 2 and validation using the Nearest Neighbor (NN) technique. The techniques

reported a similar average global gold grade with no significant conditional bias. The Mineral Resource

estimation was declared using the IDW to the power of 2. The estimation approach was considered

appropriate based on the review of several factors, including the quantity and spacing of available

data, the interpreted control on miner alization, the style and geometry of the mineralization as well as

geological logging and additional information recorded from the drill holes. TSFs and sand dumps are

man-made engineering features which was considered in the estimation process. Ordinary Kriging was

considered unnecessary for TSF and sand dump evaluation as the main aim was to obtain global

averages rather than local variations considering the envisaged or applied mining method.

Mineral Resources were estimated for all the TSFs, and the estimation procedures are similar in approach

for all the TSFs and sand dumps. However, each TSF and sand dump is treated as a separate entity as

each has differences due to data distribution and characteristic of the material. Estimation procedures

and parameters are given individually per TSF or sand dump.

All tailings material is above the current land surface and continuity of grade within the TSFs is defined

based on +/-100m drill hole spacing. The tailings material has been processed through a metallurgical

treatment plant that ejects a waste residue that is relatively uniform when compared with the natural

deposit from which the material is derived. The variation between samples and drill hole is small (0.1g/t

to 1.0g/t) in comparison to in situ gold deposits. However, the percentage difference may be huge as

is the case with trace elements.

Datamine’s Studio RM geological modelling software was used as the modelling tool. Most of the

statistical and geostatistical study was completed using SAS JMP Pro and the RStudio, an open-source

integrated development environment for “R”, a programing language for advanced statistical

computing and graphics.

Mineral Resource estimates are not Mineral Reserves and do not have demonstrated economic viability.

There is no certainty that all or any part of the Mineral Resource will be converted into a Mineral Reserve.

The Mineral Resource estimates for all the TSFs and a sand dump are declared as follows:

●

the point of reference is

in situ

. The TSFs or sand dumps themselves are the reference points;

●

no geological or other losses were applied as all material is accessible and there are no

geological structures;

●

Mineral Resource estimates are stated as both inclusive and exclusive of Mineral Reserves as

defined in Subpart 1300 of Regulation S-K; and

●

the Mineral Resource is 100% attributable to Ergo. DRDGOLD, the registrant, owns 100% of Ergo.

Item 11.1 to Item 11.7 present the methodology followed a similar methodology for all the TSFs and sand

dumps. Item 11.9 to Item 11.16 provides detail for each complex, TSF or sand dump.

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76

The 79 smaller TSFs and clean-up material contribute about 11% of the total Mineral Resource estimates

by tonnage. The Mineral Resource estimates in these smaller dumps pose a less than material risk to

Ergo. Their Mineral Resource was estimated from survey information , production and/or historical data,

applying straight arithmetic average s as the TSFs or clean-up sites are too small to be evaluated by 3D

modelling. The QP considered the inclusion of the TSFs and clean-up operations as appropriate and has

conducted verification checks to support their inclusion. The Mineral Resource estimates of these TSFs

and clean-up operations are not discussed individually, but they are part of the total Mineral Resource

for Ergo.

11.1 Volume Modelling

For all significant TSFs, three-dimensional (3D) modelling was completed using drill hole information and

survey data. Volumes were estimated using a top surface defined by a ground survey and associated

digital terrain model. The bases of the TSFs were defined by the drill hole data and the edges of the TSFs.

All drill holes were drilled to intersect soil at the base of the TSFs. The block models were constructed

inside of this volume. Tonnages and grades were then extracted from the block models.

11.2 Bulk Dry Density

An average dry bulk density of 1.42t/m

3

 described in Item 7.17 was applied to all the TSFs and the sand

dumps. The tons were reported as dry tons.

11.3 Exploratory Data Analysis 

Exploratory data analysis was done on raw and composited gold data. Samples were collected at 1.5m

intervals. For IDW estimation method, the sample lengths were adequate. The samples were further

composited to 6m to allow for NN estimation as the modelled blocks were 6m high to represent bench

height. Samples were composited based on mean sea level to mimic deposition. This allowed for

estimations to be carried out based on the levels.

The requirement for high-grade capping was assessed to ascertain the reliability and spatial clustering

of the high-grade data. The steps completed as part of the high-grade capping assessment are

summarized below:

●

review of the data to identify any data that deviates from the general data distribution. This was

completed using histograms and log probability plots;

●

review of plots comparing the contribution to the mean and standard deviation of the highest-

grade data; and

●

visual review in 3D to allow assessment of the clustering of the higher-grade data.

11.4 Estimation Techniques

The estimation was constrained by the mineralization interpretations. The statistical characteristics of the

available sample information and the spatial distribution aided the definition of the estimation

parameters, such as search volume and orientation of the search ellipses.

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The IDW (to the power of 2) and NN method of estimation were chosen as the most appropriate

methods for evaluation of TSFs and sand dumps, as the dataset for each TSF and sand dump is generally

homogeneous (laterally), grade variations are small due to deposition technique and the drill holes are

well spread and spacing is moderately wide. The methods, when applied appropriately, retain the

grade variation of the deposit, as opposed to an arithmetic average, and is simpler and more

appropriate for TSF or sand dump evaluation than other advanced estimation techniques such as

Ordinary Kriging. 

These estimation techniques have been found to be reliable by Ergo over the last 15 years of mining

TSFs and sand dumps.

Hard domain boundaries were used throughout, preventing samples lying outside the domain from

being used for the estimation meaning slime and soil samples were separated during the estimation

process. A three-pass estimation strategy was applied to each zone, applying an expanded and less

restrictive sample search to the second and subsequent estimation passes and only considering blocks

not previously assigned an estimate. However, more than 80% of the estimates were completed in the

first pass. A record was kept of the number of samples used to estimate the grade into a block. The

variance of each block and the search volume that satisfied the criteria used to select samples for use

in the estimation of each block.

11.5 Modelling and Estimation Parameters

The parent block size for all the TSFs and sand dumps was largely based on the average drill spacing

and sample compositing interval. The height of the original dump benches is approximately 5m to 6m.

The parent block size is selected to estimate the deposit approximates half the drill hole spacing and

maps the bench height. Sub-blocking was allowed for a good volume definition.

11.6 Model Validation

A routine validation process was followed for all the TSFs and sand dumps. All relevant statistical

information was recorded to enable validation and review of the estimates.

The recorded information included:

●

the number of samples used per block estimate;

●

average distance to samples per block estimate;

●

estimation flag to determine in which estimation pass a block was estimated; and

●

the number of drill holes from which composite data were used to complete the block estimate.

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The estimates were reviewed visually and statistically prior to being accepted. The review included the

following activities:

●

comparison of volume estimates between the block model, the 3D wireframe model and the

surveyor's report;

●

check for global bias through comparison of the estimate versus the mean of the composite

dataset, including weighting where appropriate to account for data clustering;

●

histogram comparison of grade block distribution versus composite grade distribution;

●

visual checks of cross-sections, long-sections and plans; and

●

where production data was available, reconciliation was carried out as part of the model

validation process.

Alternative estimates were also completed to test the sensitivity of the reported model to the selected

interpolation parameters. An insignificant amount of variation in overall grade was noted in the

alternate estimations. The results were satisfactory for the level of accuracy anticipated for TSF

evaluation.

11.7 Technical and Financial Parameters

In determining the cut-off grades of the Mineral Resources, the QP applied the data presented in Table

11.1.

The QP considered the gold price , exchange rate and working cost per ton (long-term prices as at 30

June 2022), as applied reasonable for use in declaring the Mineral Resources. Justification for the

financial parameters used is detailed in Item 16. Additional technical parameters per TSF or sand dump

are presented in the relevant items. The QP considered both technical and financial parameters

(infrastructure, mine design and planning, processing plant, environmental compliance and permitting)

to justify the reasonable prospects for economic extraction. All complexes except Crown and Grootvlei

Complexes have studies done to a PFS level of accuracy (i.e., +/- 25%). For the Crown and Grootvlei

Complexes, initial assessments were completed.

Table 11.1: Financial and Technical Data considered for Mineral Resource

Element

Unit

Value

Mineral Resource Gold Price

USD/oz

1,823

Mineral Resource Gold Price

ZAR/kg

914,294

Exchange Projection

ZAR/USD

15.60

Working Costs per Ton (slimes)

ZAR/t

70.76

Working Costs per Ton (sand)

ZAR/t

204.46

Source: DRDGOLD, 2022

The QP has considered that Ergo does not selectively mine a TSF. The average grade of the TSF is used

to determine whether or not a TSF is mined in its entirety. Where the average grade of the TSF is above

the cut-off grade , all the material in the TSF or sand dump is considered to be mined. The QP applied

no block cut-off.

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79

A cut-off grade is also determined per TSF or sand dump. A TSF may report an average gold grade

below a cut-off grade, but when included in a complex, the total complex should be above the cut-

off grade. See Table 11.2 for the cut-off information. The QP determined cut-off grades using the formula

presented in Item 12.2.

Table 11.2: Mineral Resource Estimate Cut-off Grades

TSF/Sand Dump

Recovery

Cut-off Grade

(%)

(g/t)

Crown Complex

3L8 (GMTS)

41

0.189

3L7 (Mooifontein)

40

0.193

3L5 (Diepkloof)

36

0.215

Average for the Complex

0.199

City Deep Complex

4L3

60

0.129

4L4

41

0.189

4L6

58

0.133

Average for the Complex

0.150

Knights Complex

4L14

44

0.176

4L50

35

0.221

Average for the Complex

0.199

Ergo Complex

Rooikraal

33

0.235

7L15

47

0.165

Average for the Complex

0.200

Marievale Complex

7L4

52

0.149

7L5

34

0.228

7L6

30

0.258

7L7

39

0.198

Average for the Complex

0.208

Grootvlei Complex

6L16

33

0.235

6L17

47

0.165

6L17A

39

0.198

Average for the Complex

0.199

5A10/5L27 Sand Dump

5A10/5L27

55

0.407

Daggafontein TSF

Daggafontein

35

0.221

Source: The RVN Group, 2022

The following statements apply to all Mineral Resources tables:

●

Mineral Resources are not Mineral Reserves;

●

Mineral Resources are reported inclusive and exclusive of Mineral Reserves;

Technical Report Summary of the material Tailings Storage Facilities

80

●

Mineral Resources have been reported in accordance with Subpart 1300 of Regulation S-K;

●

Mineral Resources were estimated using the USD1,823/oz, ZAR15.60/USD and ZAR914,294/kg

financial parameters;

●

the recovery information is presented in Table 11.2;

●

the reference point is

in situ

;

●

a troy ounce = 31.1034768g; and

●

quantities and grades were rounded to reflect the accuracy of the estimates; any apparent

errors are insignificant.

11.8 Uncertainties and Classification Criteria

Definitions for Mineral Resource categories used in this report are those defined by the Security and

Exchange Commission in Subpart 1300 of Regulation S-K. Mineral Resource Estimates are classified to

reflect the increased level of geological confidence into Inferred, Indicated and Measured Mineral

Resource categories.

By their nature, all Mineral Resource estimates carry an inherent amount of risk and uncertainty

depending on various factors, including interpretation of data, drilling data quality, uncertainty in the

survey and metallurgical test work data collected and the modelling process. However, Ergo has been

in operation for more than 20 years treating TSFs and sand dumps and has sufficiently mitigated Mineral

Resource risks through obtaining sufficient sampling information. Some uncertainties were resolved

through reconciliations, process improvement and the use of experienced personnel in data collection

and interpretation.

The QP based the Mineral Resource categorization on the robustness of the various data sources

available, the confidence of the geological interpretation and various estimation parameters (e.g.,

distance to data, number of data, maximum search radii etc.) and reconciliation data where it is

available. The QP considers the Mineral Resource classification as a function of the confidence of the

whole process from drilling, sampling, geological understanding and variables relationships. TSFs and

sand dumps are evaluated individually and there are no blanket classification parameters as TSFs and

sand dumps are different . However, drill hole spacing and data quality contribute significantly to the

classification confidence.

Each TSF or sand dump has its classification criteria discussed separately.

The Mineral Resource confidence is assessed via internal peer reviews, with no material issues identified.

Mineral Resources have reasonable prospects for economic extraction and the QP considered a range

of mining, processing, infrastructural, social, environmental and permitting factors.

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81

11.9 Crown Complex

11.9.1 Exploratory Data Analysis

Statistical analysis of data was completed as presented in Figure 11.1 to Figure 11.8. Data was analyzed

as raw, capped and composites. There was no material changed between the data sets. The data sets

show positively skewed distribution. 

Based on the high-grade cap investigations, high-grade caps were selected and applied to the raw

dataset:

●

3L7 (Mooifontein): gold grades were capped at 0.60g/t;

●

3L8 (GMTS): gold grades were capped at 0.60g/t; and

●

3L5 (Diepkloof): two domains (compartments) were modelled and gold grades were also

capped at 0.60g/t.

Capping was only applied to raw data and its impact on the mean was immaterial.

3L5 (Diepkloof TSF) was domained into two areas because of physical separation between the two

compartments (Homestead and Diepkloof).

Figure 11.1: 3L7 (Mooifontein): Distribution of Raw Gold Capped Data

Source: The RVN Group, 2022

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82

Figure 11.2: 3L7 (Mooifontein): Distribution of Composited Gold Data

Source: The RVN Group, 2022

Figure 11.3: 3L8 (GMTS): Distribution of Raw Gold Capped Data

Source: The RVN Group, 2022

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Figure 11.4: 3L8 (GMTS): Distribution of Composited Gold Data

Source: The RVN Group, 2022

Figure 11.5: 3L5 (Diepkloof: Diepkloof): Distribution of Raw Gold Capped Data

Source: The RVN Group, 2022

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Figure 11.6: 3L5 (Diepkloof: Diepkloof): Distribution of Composited Gold Data

Source: The RVN Group, 2022

Figure 11.7: 3L5 (Diepkloof: Homestead): Distribution of Raw Gold Capped Data

Source: The RVN Group, 2022

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85

Figure 11.8: 3L5 (Diepkloof: Homestead): Distribution of Composited Gold Data

Source: The RVN Group, 2022

11.9.2 Modelling and Estimation Parameters

Half the drill hole spacing was chosen as the block size. Block size of 100m-by-100m-by-6m was chosen

for the TSFs. Sub-celling was allowed for better volume definition.

The sample search parameters are supplied in Table 11.3.

Table 11.3: Search Parameters: Inverse Distance Estimation Method

TSF

Domain

Estimation

Pass

Search Distance

Minimum

Number of

Composites

Maximum

Number of

Composites

X

(m)

Y

(m)

Z

(m)

3L7 (Mooifontein)

Mooifontein

1

300

300

6

5

20

2

600

600

12

5

20

3

900

900

18

5

20

3L8 (GMTS)

GMTS

1

400

400

10

4

10

2

800

800

20

4

10

3

1,200

1,200

30

4

10

3L5 (Diepkloof)

Homestead

1

400

400

10

4

10

2

800

800

20

4

10

3

1,200

1,200

30

4

10

Diepkloof

1

400

400

10

4

10

2

800

800

20

4

10

3

1,200

1,200

30

4

10

Source: The RVN Group, 2022

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11.9.3 Technical and Economic Factors

11.9.3.1 Site Infrastructure

Crown Complex is located in a well-developed area (Johannesburg) with most mining infrastructure in

place. Johannesburg is a megacity and is one of the 100

th

 largest urban cities in the world.

Johannesburg was established in the 1880s following the discovery of gold.

Roads:

Access to the Crown Complex is via the N1 highway and a network of the well-maintained

paved road systems.

Power:

Power requirements are primarily for the operation of pumps and site offices. Power is sourced

from the national supplier, the Electricity Supply Commission (Eskom). There is power supply from17#

substation to the surrounding areas and the TSFs.

Site Offices and Workshop:

 Site offices are typically established by mining contractors as part of the

mining contract. Workshops for maintenance of roads, pumps and pipelines are based at the Ergo

processing plant and no additional infrastructure is required.

Crown Complex is situated in the City of Johannesburg, so other specialized services could be sourced

from the private workshops.

Pumps and Pipelines:

 Before mining could start, the pump station and pipeline to Ergo processing plant

in Brakpan should be completed. A pipeline of approximately 20km will be required to supply slime to

City Deep. There is already a pipeline infrastructure to transport slime to Ergo Plant from City Deep; this

may need to be upgraded along with a water supply pipeline at a later stage.

Water:

 Water is required during mining as hydraulic mining method is suitable for Crown Complex. A

Mining Right renewal application has been launched. Crown Complex has the majority of the water

uses authorized and would only require minor amendments, but this would only be able to 100% defined

when the entire scope and design of the project is finalized. Ergo is confident that a water use license

will be issued.

Tailings Deposition Site:

 Ergo has sufficient tailings deposition capacity at their Brakpan/Withok tailings

deposition facility to accommodate all material from Crown Complex, in addition to the tonnages in

the LoM plan if the final design of the Brakpan/Withok TSF is approved and implemented. Refer to Item

15.7 and 19.3.2 for more detail on deposition plans.

11.9.3.2 Mine Design and Planning

Hydraulic mining is suitable for Crown Complex. Hydraulic mining can loosely be defined as the

excavation of material from its

in situ

 state using water. A stream of water is directed at the tailings

material with the purpose of mechanically breaking and/or softening the material so that it can be

carried away by the water flow. The application or effectiveness of the method is a function of a variety

of factors ranging from the size, velocity and pressure of the water stream to the location, hardness,

particle size and moisture content of the material to be mined.

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87

Hydraulic mining is typically undertaken using 100mm or 150mm monitor guns with increased production

achieved by the inclusion of additional units. This provides a high degree of flexibility that allows

simultaneous mining at a number of points over a wide range of production rates. Consequently, grade

blending is readily achievable.

A production rate of 3 x 600kt/m is assumed from Crown Complex due to pipeline capacity.

11.9.3.3 Processing Plant

Crown Complex material could be processed at Ergo’s processing plant as discussed in Item 10 and the

results presented in Table 10.1. The slime material is not significantly different to the slimes material

processed at the Ergo processing plant. The Ergo processing plant details are in Item 14.

11.9.3.4 Environmental Compliance and Permitting

A Mining Right renewal application was launched with the DMRE. Compliance and permitting are

discussed in Item 3.2 and 17.

11.9.3.5 Initial Assessment Results

The QP’s opinion is that there is a reasonable prospect for economic extraction based on the total mix

of technical and financial factors discussed. A cut-off grade is discussed in Item 12.2.11.7

11.9.4 Mineral Resource Classification Criteria

A list of the criteria used to classify the Mineral Resources is given in Table 11.4. Applying these

confidence levels, Mineral Resource classification codes were assigned to the block model. A low

confidence in one of the listed items will mean classification is downgraded to Inferred, a moderate

confidence in at least one item will mean a property is Indicated while all highs mean the property is in

the Measured Mineral Resource category.

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88

Table 11.4: Confidence Levels for Key Criteria for Mineral Resource Classification

Items

Discussion

Confidence

Drilling Techniques

RC drilling technique to international standards

High

Logging

Detailed logging throughout

High

Drill Sample Recovery

The sample recovery was considered satisfactory and was

acceptable for mineral resource estimation

High

Sub-sampling Techniques

and Sample Preparation

Material has previously been processed and quartering was

applied

High

Quality of Assay Data

Available data is of robust quality however there is a relatively high

variability in the lowest grade assays

High

Verification of Sampling

and Assaying

A comprehensive QC program implemented during exploration

High

Location of Sampling

Points

Survey of all collars and TSFs surfaces

High

Data Density and

Distribution

Data points were well spread, though widely spaced.

Approximately 200m-by-200m spacing was followed

Moderate

Database Integrity

Errors identified and rectified

High

Geological Interpretation

Geometry is known accurately

High

Bulk Density

A mean density of 1.42t/m

3

 was considered reasonable

High

Mineralization Type

Mineralization is well known from processing

High

Estimation and Modelling

Techniques

NN and Inverse Distance

High

Source: The RVN Group, 2022

The drill hole spacing was approximately 200-by-200m on all the TSFs. With this grid, the grade, floor

elevation and TSF geometry were estimated with sufficient confidence to allow the application of

modifying factors in sufficient detail to support mine planning and evaluation of the economic viability

of the TSFs. All TSFs’ material was classified as Indicated Mineral Resources. No Measured Mineral

Resource was declared as the drill space is still too wide to conclusively define grade continuity and

volume. No Inferred was declared as drilling provided sufficient information.

The data or supporting information is derived from the adequately detailed and reliable exploration,

sampling and testing and is sufficient to assume geological and grade or quality continuity between

points of observation.

11.9.5 Mineral Resource Statement

As no Mineral Reserve was declared, inclusive is equal to exclusive Mineral Resource for the Crown

Complex (Table 11.5).

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Table 11.5: Crown Complex Mineral Resource Estimate (Exclusive)

TSF

Mineral

Resource

Category

Mineral Resources as at 30 June

2021 (Exclusive)

Mineral Resources as at 30 June

2022 (Exclusive)

Tons

(kt)

Au

(g/t)

Content

(oz)

Tons

(kt)

Au

(g/t)

Content

(oz)

Measured Mineral Resources

-

-

-

-

-

-

Mooifontein (3L7)

Indicated

67,559

0.23

499,577

67,559

0.23

499,577

GMTS (3L8)

Indicated

107,450

0.25

863,649

107,450

0.25

863,649

Diepkloof (3L5)

Indicated

97,988

0.23

724,589

97,988

0.23

724,589

Sub-total Indicated Mineral

Resources

272,997

0.24

2,087,815

272,997

0.24

2,087,815

Sub-total Measured and

Indicated Mineral Resources

272,997

0.24

2,087,815

272,997

0.24

2,087,815

Inferred Mineral Resources

-

-

-

-

-

-

Total Mineral Resource

272,997

0.24

2,087,815

272,997

0.24

2,087,815

Source: The RVN Group, 2022

11.9.6 Mineral Resource Changes

There was no change in Mineral Resource as no drilling, mining or additional deposition was done on

Crown Complex.

11.9.7 Mineral Resource Risks and Uncertainty

The renewal of the Mining Right for the Crown Complex is a risk. The application to renew was launched

in 2014 and Ergo has since been constantly engaging the DMRE. This report has considered section 24(5)

of the MPRDA, as amended; as quoted below:

“

A mining right in respect of which an application for renewal has been lodged shall despite its expiry

date remain in force until such time as such application has been granted or refused.

”

The QP classified the overall Mineral Resource risk as medium due to lower grades and permitting status

of the Crown Complex.

In the opinion of the QP, no further technical work is required as the drilling program provided sufficient

data to define continuity.

11.10 City Deep Complex

11.10.1 Exploratory Data Analysis

Figure 11.9 to Figure 11.14 show the frequency distributions of the gold grades on 4L3, 4L4 and 4L6. Data

was analyzed as raw, capped and composites. There was no material changed between the data sets.

The data sets show positively skewed distribution.

Based on the high-grade cap investigations, high-grade caps were selected and applied to the raw

dataset. A little/insignificant reduction in the available metal is noted.

●

4L3: capped at 0.65g/t Au;

●

4L4: capped at 0.65g/t Au; and

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90

●

4L6: capped at 0.50g/t Au.

Figure 11.9: 4L3: Distribution of Raw Gold Capped Data

Source: The RVN Group, 2022

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91

Figure 11.10: 4L3: Distribution of Composited Gold Data

Source: The RVN Group, 2022

Figure 11.11: 4L4: Distribution of Raw Gold Capped Data

Source: The RVN Group, 2022

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92

Figure 11.12: 4L4: Distribution of Composited Gold Data

Source: The RVN Group, 2022

Figure 11.13: 4L6:

Distribution of Raw Gold Capped Data

Source: The RVN Group, 2022

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93

Figure 11.14: 4L6: Distribution of Composited Gold Data

Source: The RVN Group, 2022

11.10.2 Modelling and Estimation Parameters

A block model with 100m-by-100m blocks was constructed for 4L3, 4L4 and 4L6 inside the respective

volumes. Tonnages and grades were estimated into the block model. The parent block sizes selected

to estimate the deposit approximates the drill hole spacing. The tailings bench heights are 5m to 8m

high. The QP selected 6m in the Z direction for the City Deep Complex to correspond with the average

bench height.

The sample search parameters are supplied in the Table 11.6.

Table 11.6: Search Parameters: Inverse Distance Estimation Method

TSF

Estimation Pass

Search Distance

Minimum

Number of

Composites

Maximum

Number of

Composites

X

(m)

Y

(m)

Z

(m)

4L3

1

400

400

10

4

10

2

800

800

20

4

10

3

1,200

1,200

30

4

10

4L4

1

400

400

10

4

10

2

800

800

20

4

10

3

1,200

1,200

30

4

10

4L6

1

400

400

10

4

10

2

800

800

20

4

10

3

1,200

1,200

30

4

10

Source: The RVN Group, 2022

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11.10.3 Technical and Economic Factors

Item 13 to Item 19 were considered in declaring the Mineral Resource estimates.

11.10.4 Mineral Resource Classification Criteria

An additional list of the criteria used by the QP to classify the Mineral Resource estimates in addition to

the statistical parameters is given in Table 11.7. Applying these confidence levels, Mineral Resource

classification codes were assigned to the block model. A low confidence in one of the listed items will

mean classification is downgraded to Inferred, a moderate confidence in at least one item will mean a

property is Indicated while all highs mean the property is in the Measured Mineral Resource category.

Table 11.7: Confidence Levels of Key Criteria for Classification of the TSFs Mineral Resources

Items

Discussion

Confidence

Drilling Techniques

Auger to industry standards

High

Logging

Detailed logging throughout

High

Drill Sample Recovery

The sample recovery is estimated as >90% and was considered

acceptable for Mineral Resource estimation

High

Sub-sampling

Techniques and

Sample Preparation

Material has previously been processed and was submitted directly

for sampling

High

Quality of Assay Data

Available data is of robust quality

High

Verification of

Sampling and

Assaying

A comprehensive QC program was implemented

High

Location of Sampling

Points

Survey of all collars and TSF surfaces

High

Data Density and

Distribution

Approximately 100m-by-100m spacing was followed

high

Geological

Interpretation

Geometry is known accurately

High

Mineralization Type

Mineralization is well known from processing

High

Estimation and

Modelling Techniques

Inverse distance used for resource declaration. NN used for validation

High

Source: The RVN Group, 2022

The QP classified the Mineral Resources into the Measured Mineral Resource Category as the drill hole

spacing was tight enough (approximately 100m apart) to provide sufficient evidence of grade

continuity and estimate tons with high confidence. No Indicated and Inferred Mineral Resources were

declared.

11.10.5 Mineral Resource Statement

Table 11.8 to Table 11.9 present Mineral Resources for 4L3, 4L4 and 4L6 as at 30 June 2022.

Table 11.8: City Deep Complex Mineral Resource Estimates (Inclusive)

TSF

Mineral Resource

Category

Mineral Resources as at 30 June 2021

(Inclusive)

Mineral Resources as at 30 June 2022

(Inclusive)

Tons

Au

Content

Tons

Au

Content

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95

(kt)

(g/t)

(oz)

(kt)

(g/t)

(oz)

4L3

Measured

13,134

0.32

135,126

13,134

0.32

135,126

4L4

Measured

4,738

0.32

48,746

4,738

0.32

48,746

4L6

Measured

2,410

0.31

24,020

2,410

0.31

24,020

Sub-total Measured Mineral

Resources

20,282

0.32

207,891

20,282

0.32

207,891

Indicated Mineral Resources

-

-

-

-

-

-

Sub-total Measured and

Indicated Mineral Resources

20,282

0.32

207,891

20,282

0.32

207,891

Inferred Mineral Resources

-

-

-

-

-

-

Total Mineral Resource

20,282

0.32

207,891

20,282

0.32

207,891

Source: The RVN Group, 2022

Table 11.9: City Deep Complex Mineral Resource Estimates (Exclusive)

TSF

Mineral

Resource

Category

Mineral Resources as at 30 June 2021

(Exclusive)

Mineral Resources as at 30 June 2022

(Exclusive)

Tons

(kt)

Au

(g/t)

Content

(oz)

Tons

(kt)

Au

(g/t)

Content

(oz)

4L3

Measured

-

-

-

-

-

-

4L4

Measured

-

-

-

-

-

-

4L6

Measured

-

-

-

-

-

-

Sub-total Measured

Mineral Resources

-

-

-

-

-

-

Indicated Mineral

Resources

-

-

-

-

-

-

Sub-total Measured and

Indicated Mineral

Resources

-

-

-

-

-

-

Inferred Mineral

Resources

-

-

-

-

-

-

Total Mineral Resource

-

-

-

-

-

-

Source: The RVN Group, 2022

11.10.6 Mineral Resource Changes

There was no change in Mineral Resources as no drilling, mining or additional deposition was done on

4L3, 4L4 and 4L6 TSFs.

11.10.7 Mineral Resource Risks and Uncertainty

The QP’s opinion is that the overall grade and tonnage estimates are reasonable for mine planning

based on the drill hole data and assay statistics.

The gold price fluctuations present the main risk to the declared Mineral Resource estimates.

Risks of grade, continuity of mineralization and tons were mitigated through the reasonable drilling

space, validation procedures, metallurgical testing, advanced statistical analyses and the use of robust

modelling techniques.

The QP classified the overall Mineral Resource risk as low. In the opinion of the QP, no further technical

work is required as the drilling program provided enough data to define continuity.

Technical Report Summary of the material Tailings Storage Facilities

96

11.11 Knights Complex

11.11.1 Exploratory Data Analysis

Statistics of the sample population from raw, capped and composited data are given in Figure 11.15 to

Figure 11.28. At 4L14, both slime and soil were mineralized with soil having a maximum grade of 1.96g/t

Au. The spread of both the slimes and soil data is not large which indicates that the grade variability is

low. The gold grades for soil were capped at 0.94g/t to reduce the over-estimation of soil gold resources.

Capping reduced the mean by about 10%; however, this is due to lack of data rather than a large

volume of high-grade material. The slimes grades were composited into 6m intervals. The soil domain

was not composited as there was not enough data. The 6m composites were based on numerous

statistical tests and bench height. The bench height is 5m to 6m high.

Figure 11.15: 4L14: Distribution of Slime Raw Data

Source: The RVN Group, 2022

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97

Figure 11.16: 4L14: Log Distribution of Slime Raw Data

Source: The RVN Group, 2022

Figure 11.17: 4L14: Distribution of Slime 6m Composited Data

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

98

Figure 11.18: 4L14: Log Distribution of Slime 6m Composited Data

Source: The RVN Group, 2022

Figure 11.19: 4L14: Distribution of Soil Raw Data

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

99

Figure 11.20: 4L14: Log Distribution of Soil Raw Data

Source: The RVN Group, 2022

Figure 11.21: 4L14: Distribution of Soil Raw Capped Data

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

100

Figure 11.22: 4L14: Log Distribution of Soil Raw Capped Data

Source: The RVN Group, 2022

Figure 11.23: 4L50: Log Distribution of Raw Slime Data

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

101

Figure 11.24: 4L50: Distribution of Raw Slime Raw Data

Source: The RVN Group, 2022

Figure 11.25: 4L50: Log Distribution of Raw Capped Slime Data

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

102

Figure 11.26: 4L50: Distribution of Raw Capped Slime Data

Source: The RVN Group, 2022

 Figure 11.27: 4L50: Distribution of 3m Composited Slime Data

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

103

Figure 11.28: 4L50: Log Distribution of 3m Composited Slime Data

Source: The RVN Group, 2022

11.11.2 Modelling and Estimation Parameters

4L14:

The parent block sizes for the TSFs were mostly based on the average drill spacing and compositing

interval. The height of the dump benches is around 5m to 6m. The parent block sizes selected to estimate

the deposit approximates half the drill hole spacing. Sub-blocking was allowed for good volume

definition. Soil was modelled as a separate domain. Soil was modelled because it had high gold values,

the QP attributed this high gold value to gold remobilization from the TSF.

Estimation Parameters for 4L14 are given in Table 11.10 and Table 11.11.

Table 11.10: 4L14: Search Parameters: Nearest Neighbor Estimation Method

Domain

Estimation

Pass

Search Distance

Minimum

Number of

Composites

Maximum

Number of

Composites

Maximum

Number of

Composites

per Drill Hole

X

(m)

Y

(m)

Z

(m)

Slime

1

400

400

50

1

1

1

2

800

800

100

1

1

1

3

1,200

1,200

150

1

1

1

Soil

1

400

400

50

1

1

1

2

800

800

100

1

1

1

3

1,200

1,200

150

1

1

1

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

104

Table 11.11: 4L14: Search Parameters: Inverse Distance Estimation Method

Domain

Estimation

Pass

Search Distance

Minimum

Number of

Composites

Maximum

Number of

Composites

Maximum

Number of

Composites

per Drill Hole

X

(m)

Y

(m)

Z

(m)

Slime

1

500

500

12

5

10

2

2

1,000

1,000

24

5

10

2

3

1,500

1,500

36

5

10

2

Soil

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Source: The RVN Group, 2022

4L50:

The parent block sizes for the 4L50 TSF were mostly based on the average drill spacing and bench

height. The parent block sizes selected to estimate the deposit approximates the borehole spacing. The

bench height is 2m to 4m high. Sub-blocking was allowed to improve volume representation within the

interpreted wireframe models of the dump top and bottom surfaces.

A comparison of the 2008 and 2016 drillhole information showed that the base of the dump was not

properly defined in the 2008 drilling. There appeared to be over-drilling or extra samples at the base.

Due to this problem, it was decided to map the base of the dump using the 2016 to 2017 drilling

campaign data only. There is high confidence in the logging data from the 2016 drilling campaign.

The sample search parameters are supplied in Table 11.12 and Table 11.13.

Table 11.12: 4L50: Search Parameters: Nearest Neighbor Estimation Method

Domain

Estimation

Pass

Search Distance

Minimum

Number of

Composites

Maximum

Number of

Composites

Maximum

Number of

Composites

per Drill Hole

X

(m)

Y

(m)

Z

(m)

Slime

1

400

400

50

1

1

1

2

800

800

100

1

1

1

3

1,200

1,200

150

1

1

1

Source: The RVN Group, 2022

Table 11.13: 4L50: Search Parameters: Inverse Distance Estimation Method

Domain

Estimation

Pass

Search Distance

Minimum

Number of

Composites

Maximum

Number of

Composites

Maximum

Number of

Composites

per Drill Hole

X

(m)

Y

(m)

Z

(m)

Slime

1

500

500

6

5

10

2

2

1,000

1,000

12

5

10

2

3

1,500

1,500

24

5

10

2

Source: The RVN Group, 2022

A number of search parameters were tested; optimum parameters were chosen by the QP.

Technical Report Summary of the material Tailings Storage Facilities

105

11.11.3 Technical and Economic Factors

Item 13 to Item 19 were considered in declaring the Mineral Resource Estimates. The technical studies

were done at a PFS level. As at 30June 2022, 4L50 was being mined.

11.11.4 Mineral Resource Classification Criteria

The 4L14 and 4L50 TSFs were classified using a number of criteria including data density, estimation

statistics and TSF knowledge and interpretation. For classification purpose, blocks estimated within the

first search radius were classified as Measured Mineral Resources. The TSFs were classified as Measured

Mineral Resources.

A list of the criteria used to classify the Mineral Resources in addition to the statistical parameters, is given

in 

Table 11.14 below. Applying these confidence levels, Mineral Resource classification codes were

assigned to the block model. A low confidence in one of the listed items will mean classification is

downgraded to Inferred, a moderate confidence in at least one item will mean a property is Indicated

while all highs mean the property is in the Measured Mineral Resource category.

Table 11.14: Confidence Levels of Key Criteria for Classification of the 4L14and 4L50 TSFs

Mineral Resources

Items

Discussion

Confidence

Drilling Techniques

Auger to international standards

High

Logging

Detailed logging throughout

High

Drill Sample Recovery

The sample recovery is estimated as >90% and is considered

acceptable for Mineral Resource estimation

High

Sub-sampling Techniques

and Sample Preparation

Material has previously been processed and can be submitted

directly for sampling

High

Quality of Assay Data

Available data is of robust quality however there is a relatively

high variability in the lowest grade assays

High

Verification of Sampling and

Assaying

A comprehensive QC program implemented during exploration

High

Location of Sampling Points

Survey of all collars and TSFs surfaces

High

Data Density and

Distribution

Drilled with auger drill holes at 100m-by-100m

High

Database Integrity

Errors identified and rectified

High

Geological Interpretation

Geometry is known accurately

High

Mineralization Type

Mineralization is well known from processing

High

Estimation and Modelling

Techniques

NN and Inverse Distance Squared

High

Source: The RVN Group, 2022

Both TSFs were classified as Measured due to a tight drill hole spacing of <100m and high data quality.

This spacing enabled the QP to estimate tonnage and grade continuity with high confidence.

Production data from 4L50 matches well with the estimated values (Figure 11.29). No Indicated and

Technical Report Summary of the material Tailings Storage Facilities

106

Inferred Mineral Resources were declared as confidence in the data and estimation process followed

were high.

Figure 11.29: 4L50: Head Grade versus Modelled Average Gold Grade

Source: The RVN Group, 2022

11.11.5 Mineral Resource Statement

Table 11.15 and

Table 11.16 present the Mineral Resource for 4L14 and 4L50.

Table 11.15: Knights Complex Mineral Resource Estimates (Inclusive)

TSF

Mineral

Resource

Category

Mineral Resources as at 30 June 2021

(Inclusive)

Mineral Resources as at 30 June 2022

(Inclusive)

Tons

(kt)

Au

(g/t)

Content

(oz)

Tons

(kt)

Au

(g/t)

Content

(oz)

4L14

Measured

6,638

0.29

61,891

6,638

0.29

60,824

4L50

Measured

6,756

0.26

56,475

3,418

0.26

27,216

Sub-total Measured

Mineral Resources

13,394

0.27

118,366

10,056

0.28

88,040

Indicated Mineral

Resources

-

-

-

-

-

-

Sub-total Measured and

Indicated Mineral

Resources

13,394

0.27

118,366

10,056 

0.28

88,040

Inferred Mineral

Resources

-

-

-

-

-

-

Total Mineral Resource

13,394

0.27

118,366

10,056 

0.28

88,040

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

107

Table 11.16: Knights Complex Mineral Resource Estimates (Exclusive)

TSF

Mineral

Resource

Category

Mineral Resources as at 30 June 2021

(Inclusive)

Mineral Resources as at 30 June 2022

(Inclusive)

Tons

(kt)

Au

(g/t)

Content

(oz)

Tons

(kt)

Au

(g/t)

Content

(oz)

4L14

Measured

-

-

-

-

-

-

4L50

Measured

-

-

-

-

-

-

Sub-total Measured

Mineral Resource

-

-

-

-

-

-

Indicated Mineral

Resource

-

-

-

-

-

-

Sub-total Measured and

Indicated Mineral

Resources

-

-

-

-

-

-

Inferred Mineral Resource

-

-

-

-

-

-

Total Mineral Resources

-

-

-

-

-

-

Source: The RVN Group, 2022

11.11.6 Mineral Resource Changes

Mining on 4L50 TSF resulted in a depletion of the Mineral Resource. Depletion and reconciliation are

explained in 13. The modeled average gold grade correlated well with production data

(Figure 11.29). No mining has taken place on 4L14 TSF.

11.11.7 Mineral Resource Risks and Uncertainty

The QP’s opinion is that the overall grade and tonnage estimates are reasonable for mine planning

based on the drill hole data and assay statistics.

The gold price fluctuations present the main risk to the declared Mineral Resource estimates.

Risks of grade, continuity of mineralization and tonnage were mitigated through the reasonable drilling

spacing, validation procedures, metallurgical testing, advanced statistical analyses and the use of

robust modelling techniques.

The QP classified the overall Mineral Resource risk as low. In the opinion of the QP, no further technical

work is required as the drilling program provided enough data to define continuity.

11.12 Ergo Complex

11.12.1 Exploratory Data Analysis

11.12.1.1 Rooikraal

Exploratory data analysis was done on raw and composited gold data (Figure 11.30 and

Figure 11.31). The distribution of the raw and composite is symmetrical with similar coefficient of variation

and a low standard deviation. 

Technical Report Summary of the material Tailings Storage Facilities

108

Based on the high-grade cap investigations, the QP decided not to apply high-grade capping as no

extreme values were noted.

Figure 11.30: Rooikraal: Distribution of Raw Gold Data

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

109

Figure 11.31: Rooikraal: Log Distribution of Composited Gold Data

Source: The RVN Group, 2022

11.12.1.2 7L15

A comprehensive study on the 2015 versus the 2016 to 2017 datasets was performed. The 2015 dataset

has higher grades than the 2016 to 2017 dataset. The 2015 dataset reported an average gold grade of

0.34g/t and the 2016 to 2017 dataset has an average gold grade of 0.26g/t.

A decision was made to re-drill three drill holes and compare the 2015 samples against the 2016 samples

in the same horizon. The 2016 samples were split on-site into three subsamples and were sent to two

different laboratories. One batch was sent to the local mine laboratory (MAED-Ergo) and two batches

of same samples were sent to the Anglo Lab with completely different sample numbers to avoid the

laboratory identifying that the samples were from the same drillholes.

The results of the re-drilling showed that the old 7L15 data (2015) analyzed by the MAED (Crown)

laboratory were over-reported and should not be used in the Mineral Resource evaluation. Only the

2016 to 2017 drilling campaign dataset could be used for the estimation. The MAED laboratory analyzing

the 2016 samples is a new laboratory at the Ergo processing plant and not the old laboratory at the

Crown processing plant, which analyzed the 2015 samples.

Domaining:

7L15 has two physically visible TSFs and the grades of the TSFs are different (Figure 11 .32).

The layering in each domain did not continue into the other. The South and North domains were

separated for Mineral Resource evaluation. The North TSF (Figure 11.33 and Figure 11.34) has lower

grades than the South TSF (Figure 11.35 and Figure 11.36). The North domain has an average grade of 

0.23g/t Au and the South domain reported an average grade of 0.30g/t Au.

Technical Report Summary of the material Tailings Storage Facilities

110

Figure 11.32: 7L15: Plan showing North and South Domains

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

111

Figure 11.33: 7L15: Distribution of 2015 Raw Data - North Domain

Source: The RVN Group, 2022

Figure 11.34: 7L15: Log Distribution of 2016 Raw Data - North Domain

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

112

Figure 11.35: 7L15: Distribution of 2015 Raw Data - South Domain

Source: The RVN Group, 2022

Figure 11.36: 7L15: Log Distribution of 2016 Raw Data - South Domain

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

113

The statistical characteristics of the North and South domains are shown in Figure 11.37 to

Figure 11.40. Compositing was completed at 3m interval.

Figure 11.37: 7L15: Distribution of 3m Composited Slime Data - South Domain

Source: The RVN Group, 2022

Figure 11.38: 7L15: Log Distribution of 3m Composited Slime Data - South Domain

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

114

Figure 11.39: 7L15: Distribution of 3m Composited Slime Data - North Domain

Source: The RVN Group, 2022

Figure 11.40: 7L15: Log Distribution of 3m Composited Slime Data - North Domain

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

115

11.12.2 Modelling and Estimation Parameters

11.12.2.1 Rooikraal

The height of the original dump benches is approximately 5m to 6m. The parent block sizes selected to

estimate the deposit approximates the drill hole spacing (at least a drill hole in a block) and maps the

bench height.

A number of search parameters were tested and optimum parameters were chosen by the QP. The

sample search parameters are supplied in Table 11.17.

Table 11.17: Rooikraal: Search Parameters: Inverse Distance Estimation Method

Domain

Estimation

Pass

Search Distance

Minimum

Number of

Samples

Maximum

Number of

Samples

Maximum

Number of

Samples per

Drill Hole

X

(m)

Y

(m)

Z

(m)

Rooikraal

1

600

600

12

6

18

5

2

1,200

1,200

24

6

18

5

3

1,800

1,800

36

6

18

5

Source: The RVN Group, 2022

11.12.2.2 7L15

The parent block sizes for the 7L15 TSFs were mostly based on the average drill spacing and compositing

interval. The parent block sizes selected to estimate the deposit approximates half the borehole

spacing. Sub-blocking was allowed for good volume definition. The search parameters are presented

in Table 11.18.

Table 11.18: 7L15: Search Parameters: Inverse Distance Estimation Method

Domain

Estimation

Pass

Search Distance

Minimum

Number of

Composites

Maximum

Number of

Composites

Maximum

Number of

Composites

per Drill Hole

X

(m)

Y

(m)

Z

(m)

North

1

400

400

6

2

5

-

2

800

800

12

2

5

-

3

1,200

1,200

24

2

5

-

South

1

400

400

6

2

5

-

2

800

800

12

2

5

-

3

1,200

1,200

24

2

5

-

Source: The RVN Group, 2022

11.12.3 Technical and Economic Factors

The QP used the PFS information (Item 13 to Item 19) to declare that the Rooikraal and 7L15 TSFs have

reasonable prospects for economic extraction.

The QP opinion is that there is a reasonable prospect for economic extraction based on the total mix of

technical and economic factors discussed.

Technical Report Summary of the material Tailings Storage Facilities

116

11.12.4 Mineral Resource Classification Criteria

A list of the criteria used to classify the Mineral Resources in addition to the statistical parameters is given

in Table 11.19. Applying these confidence levels, Mineral Resource classification codes were assigned

to the block model. A low confidence in one of the listed items will mean classification is downgraded

to Inferred, a moderate confidence in at least one item will mean a property is Indicated while all highs

mean the property is in the Measured Mineral Resource category.

Table 11.19: Ergo: Confidence Levels for Key Criteria for Mineral Resource Classification

Items

Discussion

Confidence

Drilling Techniques

Auger for 7L15 and for Rooikraal TSF, RC and auger drilling

techniques were used. These methods are industry standard for

drilling TSFs

High

Logging

Detailed logging throughout

High

Drill Sample Recovery

The sample recovery was considered satisfactory and was

acceptable for Mineral Resource estimation

High

Sub-sampling Techniques

and Sample Preparation

Material has previously been processed and quartering was

applied

High

Quality of Assay Data

Available data is of robust quality however there is a relatively high

variability in the lowest grade assays

High

Verification of Sampling

and Assaying

A comprehensive QC program implemented during exploration

High

Location of Sampling

Points

Survey of all collars and TSFs surfaces

High

Data Density and

Distribution

Data points were well spread. Approximately 100m-by-100m

spacing was followed

High

Database Integrity

Errors identified and rectified

High

Geological Interpretation

Geometry is known accurately.

High

Bulk Density

A mean density of 1.42t/m

3

 was considered reasonable with a

potential upside

High

Mineralization Type

Mineralization is well known from processing

High

Estimation and Modelling

Techniques

NN and Inverse Distance

High

Source: The RVN Group, 2022

The drillhole spacing was approximately 100m-by-100m. With this grid, the grade, floor elevation and TSF

geometry were estimated with sufficient confidence to allow the application of modifying factors in

sufficient detail to support mine planning and evaluation of the economic viability of the TSF. Some

auger drill holes that did not intersect the floor, had the floor defined by the RC drill holes. All the RC drill

holes intersected the floor or the base. The TSF material was classified as a Measured Mineral Resource.

Technical Report Summary of the material Tailings Storage Facilities

117

11.12.5 Mineral Resource Statement

The Mineral Resource in Table 11.20 to Table 11.21 is 100% attributable to DRDGOLD.

Table 11.20: Ergo Mineral Resource Estimates (Inclusive)

TSF

Mineral

Resource

Category

Mineral Resources as at 30 June 2021

(Inclusive)

Mineral Resources as at 30 June 2022

(Inclusive)

Tons

(kt)

Au

(g/t)

Content

(oz)

Tons

(kt)

Au

(g/t)

Content

(oz)

7L15

Measured

17,646

0.26

147,506 

17,646

0.26

147,506 

Rooikraal

Measured

56,763

0.26

474,493 

56,763

0.26

474,493 

Sub-total Measured

Mineral Resources

74,409

0.26

621,999

74,409

0.26

621,999

Indicated Mineral

Resources

-

-

-

-

-

-

Sub-total Measured and

Indicated Mineral

Resources

74,409

0.26

621,999

74,409

0.26

621,999

Inferred Mineral

Resources

-

-

-

-

-

-

Total Mineral Resource

74,409

0.26

621,999

74,409

0.26

621,999

Source: The RVN Group, 2022

Table 11.21: Ergo Mineral Resource Estimates (Exclusive)

TSF

Mineral

Resource

Category

Mineral Resources as at 30 June 2021

(Exclusive)

Mineral Resources as at 30 June 2022

(Exclusive)

Tons

(kt)

Au

(g/t)

Content

(oz)

Tons

(kt)

Au

(g/t)

Content

(oz)

7L15

Measured

-

-

-

-

-

-

Rooikraal

Measured

-

-

-

-

-

-

Sub-total Measured

Mineral Resources

-

-

-

-

-

-

Indicated Mineral

Resources

-

-

-

-

-

-

Sub-total Measured and

Indicated Mineral

Resources

-

-

-

-

-

-

Inferred Mineral

Resources

-

-

-

-

-

-

Total Mineral Resource

-

-

-

-

-

-

Source: The RVN Group, 2022

11.12.6 Mineral Resource Changes

There was no change in the Mineral Resource as no mining or additional deposition was done on the

Rooikraal and 7L15 TSFs.

Technical Report Summary of the material Tailings Storage Facilities

118

11.12.7 Mineral Resource Risks and Uncertainty

The QP classified the overall Mineral Resource risk for both the Rooikraal and 7L15 TSFs as medium due

to the low-grade margin, gold price, recovery and working costs.

In the opinion of the QP, no further technical work is required as the drilling program provided sufficient

data to define continuity.

11.13 Marievale Complex

11.13.1 Exploratory Data Analysis

Exploratory data analysis was done on raw and composited gold data (Figure 11.41 to Figure 11.48).

Data was analyzed as raw, capped and composites. There was no material changed between the

data sets. The data sets distribution is symmetrical.

Based on the investigation, cutting or capping of the extreme values was considered. Lower extreme

grades were noted and visualized in 3D space. They were considered part of the population:

●

7L4: capping was applied at 0.45g/t Au. All gold grades greater than 0.45g/t were set as 0.45g/t;

●

7L5: no capping was applied as no outliers were noted;

●

7L6: no capping was applied as no outliers were noted; and

●

7L7: capping was applied at 0.70g/t Au to minimize the impact of extremely high values.

A study on domaining was conducted. The TSFs were not domained laterally or vertically; however, the

QP noted the vertical stratification. This stratification aided in defining the search volume (estimation

parameter) in a vertical direction.

The gold distributions are symmetrical and the variability is low, typical for a TSF.

Technical Report Summary of the material Tailings Storage Facilities

119

Figure 11.41: 7L4: Distribution of Capped Raw Gold Data

Source: The RVN Group, 2022

Figure 11.42: Distribution of Composited Raw Gold Data

Source: The RVN Group, 2022

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120

Figure 11.43: 7L5: Distribution of Raw Gold Data

Source: The RVN Group, 2022

Figure 11.44: 7L5: Distribution of Composited Gold Data

Source: The RVN Group, 2022

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121

Figure 11.45: 7L6: Distribution of Raw Gold Data

Source: The RVN Group, 2022

Figure 11.46: 7L6: Distribution of Composited Gold Data

Source: The RVN Group, 2022

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122

Figure 11.47: 7L7: Distribution of Raw Capped Gold Data

Source: The RVN Group, 2022

Figure 11.48: 7L7: Distribution of Composited Capped Gold Data

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

123

11.13.2 Modelling and Estimation Parameters

The height of the original dump benches is approximately 5m to 6m. The parent block sizes selected to

estimate the deposit approximates half the drill hole spacing and corresponds to the bench height or

multiple thereof. Sub-blocking was allowed for good volume definition.

The sample search parameters are supplied in Table 11.22.

Table 11.22: Search Parameters

Domain

Estimation Pass

Search Distance

Minimum

Number of

Composites

Maximum

Number of

Composites

Maximum

Number of

Samples Per

Drill Hole

X

(m)

Y

(m)

Z

(m)

Slime

1

400

400

6

3

10

2

2

800

800

12

3

10

2

3

1,200

1,200

18

3

10

2

Source: The RVN Group, 2022

11.13.3 Technical and Economic Factors

The technical and financial studies completed for the Marievale Complex were at the preliminary

feasibility study (PFS) level of accuracy, (i.e., +/-25%) as presented in Item 13 to Item 19. The QP

concluded that there are reasonable prospects for economic extraction.

11.13.4 Mineral Resource Classification Criteria

A list of the criteria used to classify the Mineral Resources is given in Table 11.23. Applying these

confidence levels, Mineral Resource classification codes were assigned to the block model. A low

confidence in one of the listed items will mean classification is downgraded to Inferred, a moderate

confidence in at least one item will mean a property is Indicated while all highs mean the property is in

the Measured Mineral Resource category.

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124

Table 11.23: Confidence Levels for Key Criteria for Mineral Resource Classification

Items

Discussion

Confidence

Drilling Techniques

Auger drilling technique to international standards

High

Logging

Detailed logging throughout

High

Sub-sampling Techniques

and Sample Preparation

Material has previously been processed and quartering was

applied

High

Quality of Assay Data

Available data is of robust quality however there is a relatively

high variability in the lowest grade assays

High

Verification of Sampling

and Assaying

A comprehensive QC program implemented during exploration

High

Location of Sampling Points

Survey of all collars and TSFs surfaces

High

Data Density and

Distribution

Data points were well spread

High

Database Integrity

Errors identified and rectified

High

Geological Interpretation

Geometry is known accurately

High

Bulk Density

A mean density of 1.42t/m

3

 was considered reasonable

High

Mineralization Type

Mineralization is well known from processing

High

Estimation and Modelling

Techniques

NN, and Inverse Distance

High

Source: The RVN Group, 2022

The material was classified as a Measured Mineral Resource as drill hole spacing was approximately

100m-by-100m. No Indicated or Inferred Mineral Resources were declared as the geological

confidence derived from exploration, test work and Mineral Resource estimation work was conclusive,

and the defined Mineral Resource can be used for mine planning studies.

11.13.5 Mineral Resource Statement

The Mineral Resource Estimates are stated as both an inclusive and exclusive of Mineral Reserve (Table

11.24 to Table 11.25).

Table 11.24: Marievale Mineral Resource Estimates (Inclusive)

TSF

Mineral

Resource

Category

Mineral Resources as at 30 June 2021

(Inclusive)

Mineral Resources as at 30 June 2022

(Inclusive)

Tons

(kt)

Au

(g/t)

Content

(oz)

Tons

(kt)

Au

(g/t)

Content

(oz)

7L4

Measured

17,590

0.34

192 281

17,590

0.34

192,281

7L5

Measured

6,980

0.29

65 080

6,980

0.29

65,080

7L6

Measured

12,760

0.26

106 663

12,760

0.26

106,663

7L7

Measured

16,784

0.32

172 678

16,784

0.32

172,678

Sub-total Measured

Mineral Resources

54,114

0.31

536,701

54,114

0.31

536,701

Indicated Mineral

Resources

-

-

-

-

-

-

Sub-total Measured and

Indicated Mineral

Resources

54,114

0.31

536,701

54,114

0.31

536,701

Inferred Mineral

Resources

-

-

-

-

-

-

Total Mineral Resource

54,114

0.31

536,701

54,114

0.31

536,701

Technical Report Summary of the material Tailings Storage Facilities

125

Source: The RVN Group, 2022

Table 11.25: Marievale Resource Estimates (Exclusive)

TSF

Mineral

Resource

Category

Mineral Resources as at 30 June 2021

(Exclusive)

Mineral Resources as at 30 June 2022

(Exclusive)

Tons

(kt)

Au

(g/t)

Content

(oz)

Tons

(kt)

Au

(g/t)

Content

(oz)

7L4

Measured

-

-

-

-

-

-

7L5

Measured

-

-

-

-

-

-

7L6

Measured

-

-

-

-

-

-

7L7

Measured

-

-

-

-

-

-

Measured Mineral

Resources

-

-

-

-

-

-

Indicated Mineral Resources

-

-

-

-

-

-

Sub-total Measured and

Indicated Mineral Resources

-

-

-

-

-

-

Inferred Mineral Resources

- 

- 

- 

- 

- 

- 

Total Mineral Resources

-

-

-

-

-

-

Source: The RVN Group, 2022

Notes:

1. Mineral Resources are not Mineral Reserves.

2. Mineral Resources are reported exclusive of Mineral Reserves.

3. Mineral Resources have been reported in accordance with Subpart 1300 of Regulation S-K.

4. Mineral Resources were estimated using the USD1,823/oz, ZAR15.60ZAR/USD and ZAR914,294ZAR/kg financial parameters and recoveries

in Item 11.13.3.

5. A troy ounce = 31.1034768g

6. The quantities and grades have been rounded to two decimal places; therefore, minor computational errors may occur.

11.13.6 Mineral Resource Changes

There was no change in Mineral Resource as no drilling, mining, or additional deposition was done on

Marievale Complex since the latest estimate.

11.13.7 Mineral Resource Risks and Uncertainty

The QP’s opinion is that the overall grade and tonnage estimates are reasonable for mine planning

based on the drill hole data and assay statistics. This presents a low risk for preliminary feasibility or

feasibility mine planning work, as only Mineral Resources with the highest level of geoscientific

knowledge are included in an economic assessment.

The gold price fluctuations present the main risk to the declared Mineral Resource.

Risks of grade and continuity of mineralization were mitigated through the closely spaced drilling,

validation procedures, metallurgical testing, advanced statistical analyses and the use of robust

geological modelling techniques.

The QP classified the overall Mineral Resource risk as low to medium. In the opinion of the QP, no further

technical work is required as the drilling program provided enough data to define continuity.

Technical Report Summary of the material Tailings Storage Facilities

126

11.14 Grootvlei Complex

11.14.1 Exploratory Data Analysis

Analysis of data from different campaigns was completed to check compatibility. Tools used for this

were box plots, histograms, PP and QQ plots, and ANOVA table. Datasets from different campaigns

were then combined.

Based on the high-grade cap investigations, high-grade caps were selected and applied to the raw

dataset. A little/insignificant reduction in the available metal was noted.

●

6L16: gold grades were capped at 0.70g/t;

●

6L17: gold grades were capped at 0.69g/t; and

●

6L17A: gold grades were capped at 0.65g/t.

Capping was only applied to raw data and its impact on the mean was immaterial for the 6L17 and

6L17A TSFs. One sample with 16.10g/t skewed the results for the 6L16 TSF. Additional infill drilling is required

on 6L16 TSF to further test the robustness of the high grade intersects, which, if confirmed by the infill

drilling, may support a less aggressive capping strategy.

Figure 11.54 to Figure 11.49 presents the basic statistics data for 6L16, 6L17 and 6L17A. Data was analyzed

as raw, capped and composites. There was no material changed between the data sets. The data sets

show positively skewed distribution.

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127

Figure 11.49: 6L16: Distribution of Raw Capped Gold Data

Source: The RVN Group, 2022

Figure 11.50: 6L16: Distribution of Composited Gold Data

Source: The RVN Group, 2022

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128

Figure 11.51: 6L17: Distribution of Raw Capped Gold Data

Source: The RVN Group, 2022

Figure 11.52: 6L17: Distribution of Composited Gold Data

Source: The RVN Group, 2022

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129

Figure 11.53: 6L17A: Distribution of Raw Capped Gold Data

Source: The RVN Group, 2022

Figure 11.54: 6L17A: Distribution of Composited Gold Data

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

130

11.14.2 Modelling and Estimation Parameters

The parent block size for the TSF was largely based on the average drill spacing and sample compositing

interval. The height of the original dump benches is approximately 5m to 6m. The parent block sizes

selected to estimate the deposit approximates the drill hole spacing for the 6L17 and 6L17 TSFs, half the

drill hole spacing for 6L16 TSFs and maps the bench height. Sub-blocking was allowed for a good volume

definition.

The sample search parameters are supplied in Table 11.26.

Table 11.26: Search Parameters: Inverse Distance Estimation Method

Domain

Estimation Pass

Search Distance

Minimum

Number of

Composites

Maximum

Number of

Composites

X

(m)

Y

(m)

Z

(m)

Grootvlei

1

400

400

10

5

20

2

800

800

20

5

20

3

1,200

1,200

30

5

20

Source: The RVN Group, 2022

11.14.3 Technical and Economic Factors

The Mineral Resource Estimates for the 6L16, 6L17 and 6L17A TSFs were declared considering the initial

assessment completed. The Grootvlei TSFs are not included in the LoM plan. The cut-off grade details

are presented in Table 11.2.

11.14.3.1 Site Infrastructure

Roads:

Access to the Grootvlei Complex is via the N17 highway and a network of well-maintained

paved road system. The operation is accessed via gravel roads.

Power:

Power requirements are primarily for the operation of pumps and site offices. Power is sourced

from the national supplier, Eskom. There is a power supply near the TSFs.

Site Offices and Workshop:

 Site offices are typically established by mining contractors as part of the

mining contract. Workshops for the maintenanc e of roads, pumps and pipelines is based at the Ergo

processing plant and no additional infrastructure is required.

The Grootvlei Complex is situated in the City of Ekurhuleni, so other specialized services could be sourced

from the private workshops.

Pumps and Pipelines:

 Before mining can start, the pump station and pipeline to the Ergo processing

plant in Brakpan will be required to be completed. As other TSFs in the same vicinity are in the LoM plan

with a detailed pipeline plan, it is the QP’s view that a shorter (less than 5km) pipeline will be required to

connect the Grootvlei TSFs to the other planned pipeline network (for Daggafontein TSF in the LoM plan

done at PFS level).

Tailings Deposition Site:

 Ergo has sufficient tailings deposition capacity at their Brakpan/Withok TSF to

accommodate all material from Grootvlei Complex , in addition to the tons in the LoM plan provided

regulatory approval for the Brakpan/Withok TSF final design is obtained. See Item 15.7 and Item 19.3.2

for more information on the deposition plans.

Technical Report Summary of the material Tailings Storage Facilities

131

11.14.3.2 Mine Design and Planning

Mine design and planning will be similar to the one in Item 13.1.1. A production rate of 600ktpm (200ktpm

per TSF) is assumed due to the pipeline capacity as the TSFs could be mined together with others in the

same vicinity.

11.14.3.3 Processing Plant

The Grootvlei Complex material could be processed at the Ergo processing plant (see Item 10.5.).

11.14.3.4 Environmental Compliance and Permitting

Ergo’s Prospecting Rights covering the Grootvlei Complex are presented in Item 3.3.

Ergo complies with all environmental and social responsibilities as required by the MPRDA, as amended.

No known environmental issues were identified during the site visit and documentation review. There is

an EMP approved by the DMRE. There are no exclusions of material or area due to Environmental, Social

and Governance considerations.

As discussed in Item 3.6, there is a competing ownership claim over the Grootvlei Complex.

11.14.3.5 Initial Assessment Results

The QP’s opinion is that there is a reasonable prospect for economic extraction based on the total mix

of technical and economic factors discussed.

11.14.4 Mineral Resource Classification Criteria

A list of the criteria used to classify the Mineral Resources, in addition to the statistical parameters, is

given in Table 11.27. Applying these confidence levels, Mineral Resource classification codes were

assigned to the block model. A low confidence in one of the listed items will mean classification is

downgraded to Inferred, a moderate confidence in at least one item will mean a property is Indicated

while all highs mean the property is in the Measured Mineral Resource category.

Technical Report Summary of the material Tailings Storage Facilities

132

Table 11.27: Confidence Levels for Key Criteria for Mineral Resource Classification

Items

Discussion

Confidence

Drilling Techniques

Auger and RC drilling technique to international standards

High

Logging

Detailed logging throughout

High

Drill Sample Recovery

The sample recovery was considered satisfactory and was

acceptable for Mineral Resource estimation

High

Sub-sampling

Techniques and

Sample Preparation

Material has previously been processed and quartering was applied

High

Quality of Assay Data

Available data is of robust quality however there is a relatively high

variability in the lowest grade assays

High

Verification of

Sampling and

Assaying

Full QC program implemented during exploration

High

Location of Sampling

Points

Survey of all collars and TSFs surfaces

High

Data Density and

Distribution

Data points were well spread, though widely spaced. Approximately

100m-by-100m spacing was followed for 6L17 and 6L17A TSFs. 6L16 TSF

has an average drill hole spacing of 200m-by-200m

High (6L17

and 6L17A)

Moderate for

6L16

Database Integrity

Errors identified and rectified

High

Geological

Interpretation

Geometry is known accurately

High

Bulk Density

A mean density of 1.42t/m

3

 was considered reasonable

High

Mineralization Type

Mineralization is well known from processing

High

Estimation and

Modelling

Techniques

NN and Inverse Distance

High

Source: The RVN Group, 2022

The drill hole spacing was approximately 100-by-100m on the 6L17 and 6L17A TSFs. With this grid, the

grade, floor elevation and TSF geometry were estimated with sufficient confidence to allow the

application of modifying factors in sufficient detail to support mine planning and evaluation of the

economic viability of the TSFs. The 6L17 and 6L17A TSFs were classified in the Measured Mineral Resource

category. The 6L16 TSF was declared as Indicated Mineral Resource, as the drill space is too wide (200m-

by-200m).

The data or supporting information is derived from adequately detailed and reliable exploration,

sampling and testing and is sufficient to assume geological and grade or quality continuity between

the points of observation.

11.14.5 Mineral Resource Statement

The Mineral Resource Estimates for the Grootvlei Complex is presented in Table 11.28. No Mineral Reserve

was declared on the Grootvlei TSFs, so exclusive and inclusive are equal.

Technical Report Summary of the material Tailings Storage Facilities

133

Table 11.28: Grootvlei Complex Mineral Resource Estimates (Exclusive)

TSF

Mineral

Resource

Category

Mineral Resources as 30 June 2021

(Exclusive)

Mineral Resources as at 30 June 2022

(Exclusive)

Tons

(kt)

Au

(g/t)

Content

(oz)

Tons

(kt)

Au

(g/t)

Content

(oz)

6L17

Measured

49,320

0.26

412,275

49,320

0.26

412,275

6L17A

Measured

16,716

0.26

140,807

16,716

0.26

140,807

Sub-total Measured

Mineral Resources

66,036

0.26

553,082

66,036

0.26

553,082

6L16

Indicated

41,619

0.26

347,901

41,619

0.26

347,901

Sub-total Indicated

Mineral Resources

41,619

0.26

347,901

41,619

0.26

347,901

Sub-total Measured and

Indicated Mineral

Resources

107,655

0.26

900,984

107,655

0.26

900,984

Inferred Mineral

Resources

-

-

-

-

-

-

Total Mineral Resource

107,655

0.26

900,984

107,655

0.26

900,984

Source: The RVN Group, 2022

11.14.6 Mineral Resource Changes

There was no change in Mineral Resource as no additional drilling, mining, additional deposition or study

was done on the Grootvlei Complex.

11.14.7 Mineral Resource Risks and Uncertainty

The renewal of the Prospecting Right for the Grootvlei Complex is a risk. The application to renew was

launched in 2019 and Ergo is awaiting the granting of the Prospecting Permit from the DMRE. This report

has considered section 18(5) of the MPRDA, as ame nded:

“

A prospecting right in respect of which an application for renewal has been lodged shall despite its

expiry date remain in force until such time as such application has been granted or refused.

”

There is an ownership claim as detailed in Item 3.6.

The QP classified the overall Mineral Resource risk as high. In the opinion of the QP, no further technical

work is required as the drilling program provided sufficient data to define continuity.

11.15 5A10/5L27 Sand Dumps

11.15.1 Exploratory Data Analysis

Exploratory data analysis was performed on gold grades. No capping was applied as data shows no

extreme values. Samples were composited to 6m interval. The mean did not change materially after

compositing into 6m interval.

Figure 11.55 and Figure 11.56 present the basic statistical data for the 5A10/5L27 sand dumps. Data was

analysed as raw, capped and composites. There was no material changed between the data sets. The

data sets show positively skewed distribution.

Technical Report Summary of the material Tailings Storage Facilities

134

Figure 11.55: 5A10/5l27: Distribution of Raw Gold Data

Source: The RVN Group, 2022

Figure 11.56: 5A10/5l27: Distribution of Composited Gold Data

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

135

11.15.2 Modelling and Estimation Parameters

The parent block size for the sand dumps was largely based on the average drill spacing and sample

compositing interval. The height of the original sand dump benches is approximately 5m to 6m. The

parent block sizes selected to estimate the deposit approximates the drill hole spacing and maps the

bench height. Sub-blocking was allowed for a good volume definition.

The sample search parameters are supplied in

Table 11.29

.

Table 11.29: Search Parameters: Inverse Distance Estimation Method

Domain

Estimation Pass

Search Distance

Minimum

Number of

Composites

Maximum

Number of

Composites

X

(m)

Y

(m)

Z

(m)

5A10/5l27

100

100

50

4

10

100

200

200

100

4

10

200

300

200

200

4

10

300

Source: The RVN Group, 2022

11.15.3 Technical and Economic Factors

The QP declared the Mineral Resource estimate for the 5A10/5L27 sand dumps considering technical

and economic studies in Item 13 to Item 19.

11.15.4 Mineral Resource Classification Criteria

A list of the criteria used to classify the Mineral Resources in addition to the statistical parameters is given

in Table 11.30. Applying these confidence levels, the Mineral Resource classification codes were

assigned to the block model.

Technical Report Summary of the material Tailings Storage Facilities

136

Table 11.30: Confidence Levels for Key Criteria for Mineral Resource Classification

Items

Discussion

Confidence

Drilling Techniques

Auger and drilling technique to international standards

High

Logging

Detailed logging throughout

High

Drill Sample Recovery

The sample recovery was considered satisfactory and was

acceptable for Mineral Resource estimation

High

Sub-sampling Techniques

and Sample Preparation

Material has previously been processed and quartering was

applied

High

Quality of Assay Data

Available data is of robust quality however there is a relatively

high variability in the lowest grade assays

High

Verification of Sampling

and Assaying

Full QC program implemented during exploration

High

Location of Sampling Points

Survey of all collars and TSFs surfaces

High

Data Density and

Distribution

Data points were well spread, though widely spaced.

Approximately 50m-by-100m spacing was followed. Where drill

holes did not intersect the base, holes were completed on the

edge

High

Database Integrity

Errors identified and rectified

High

Geological Interpretation

Geometry is known accurately

High

Bulk Density

A mean density of 1.42t/m

3

 was considered reasonable

High

Mineralization Type

Mineralization is well known from processing

High

Estimation and Modelling

Techniques

NN and Inverse Distance

High

Source: The RVN Group, 2022

The drill hole spacing enabled the QP to define gold grades, floor elevation and sand dump geometry.

This provide the QP conclusive confidence to allow the application of modifying factors in sufficient

detail to support mine planning and evaluation of the economic viability of the sand dumps. The sand

dumps were classified as Measured Mineral Resources. The data or supporting information is derived

from the adequately detailed and reliable exploration, sampling and testing and is sufficient to assume

geological and grade or quality continuity between points of observation. The resource model and

production data reconciled well with less than a 1% grade difference. This was also considered in

classifying the 5A10/5L27 sand dumps as Measured Mineral Resources.

Technical Report Summary of the material Tailings Storage Facilities

137

11.15.5 Mineral Resource Statement

The Mineral Resource estimates for the 5A10/5L27 sand dumps are presented in Table 11.28 to Table

11.32.

Table 11.31: 5A10/5L27 Mineral Resource Estimates (Inclusive)

TSF

Mineral

Resource

Category

Mineral Resources as 30 June 2021

(Inclusive)

Mineral Resources as at 30 June 2022

(Inclusive)

Tons

(kt)

Au

(g/t)

Content

(oz)

Tons

(kt)

Au

(g/t)

Content

(oz)

5L27 (East)

Measured

5,965

0.48

92,054

3,979

0.49

60,467

5L27 (North)

Measured

4,288

0.28

38,601

4,288

0.28

38,601

5A10

Measured

2,117

0.61

41,519

1,595

0.61

31,285

Sub-total Measured Mineral

Resources

12,370

0.43

172,174

9,862

0.42

128,075

Indicated Mineral

Resources

-

-

-

-

-

-

Sub-total Measured and

Indicated Mineral

Resources

12,370

0.43

172,174

9,862

0.42

128,075

Inferred Mineral Resources

-

-

-

-

-

-

Total Mineral Resource

12,370

0.43

172,174

9,862

0.42

128,075

Source: The RVN Group, 2022

Table 11.32: 5A10/5L27 Mineral Resource Estimates (Exclusive)

TSF

Mineral

Resource

Category

Mineral Resources as 30 June 2021

(Exclusive)

Mineral Resources as at 30 June 2022

(Exclusive)

Tons

(kt)

Au

(g/t)

Content

(oz)

Tons

(kt)

Au

(g/t)

Content

(oz)

5L27

Measured

-

-

-

-

-

-

5A10

Measured

-

-

-

-

-

-

Sub-total Measured Mineral

Resources

-

-

-

-

-

-

Indicated Mineral

Resources

-

-

-

-

-

-

Sub-total Measured and

Indicated Mineral

Resources

-

-

-

-

-

-

Inferred Mineral Resources

-

-

-

-

-

-

Total Mineral Resource

-

-

-

-

-

-

Source: The RVN Group, 2022

11.15.6 Mineral Resource Changes

Mining took place on the 5A10 sand dump reclaiming 808kt at 0.61g/t Au in the last financial year. The

mined and modelled tonnage and grades reconciled well.

Technical Report Summary of the material Tailings Storage Facilities

138

11.15.7 Mineral Resource Risks and Uncertainty

The QP’s opinion is that the overall grade and tonnage estimates are reasonable for mine planning

based on the borehole data and assay statistics. Production data reconciled well with the block model.

The gold price fluctuations and lower grades of sand material present the main risk to the declared

Mineral Resource.

The QP classified the overall Mineral Resource risk as low to medium. In the opinion of the QP, no further

technical work is required as the drilling program provided enough data to define continuity.

11.16 Daggafontein TSF

11.16.1 Exploratory Data Analysis

The QP tested if there was a material difference in the gold grades from the various drilling campaigns

to ascertain if the datasets from the different campaigns were compatible. Figure 11.57 shows the box

plots of the different campaigns. The difference was considered minor by the QP. The 2017 drilling

campaign reported slightly higher grades. This campaign, however only comprised two drill holes (on

either side of the TSF

–

 east and west). Analysis of variance and a Tukey (Honest Significant Differences)

HSD plot showed that there is a difference in sample means between 2017 and the other campaigns.

The QP investigated the differences and concluded that the difference is due to the amount of data

per campaign and spatial distribution of the data point. Accordingly, the QP concluded that data from

the campaigns could be combined.

Figure 11.57: Boxplots for the Different Drilling Campaigns

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

139

The drill hole individual sample gold grades are positively skewed. The mean of the gold grades is

0.24g/t.

Based on the statistical investigation, cutting or capping of the extreme values was not considered

(Figure 11.58). Lower extreme grades were noted and visualized in 3D space. They were considered part

of the population.

Figure 11.58: Log Probability Plot

Source: The RVN Group, 2022

A study on domaining was conducted. This was done through analysis of zones based on TSF material,

color and spatial grade analysis. The TSF was not domained laterally or vertically, however, the QP noted

the vertical stratification. This stratification aided in defining the search volume in the vertical direction.

No capping was applied.

11.16.2 Modelling and Estimation Parameters

The parent block size for the TSF was largely based on the average drill spacing and sample compositing

interval.

Technical Report Summary of the material Tailings Storage Facilities

140

The sample search parameters are supplied in Table 11.33.

Table 11.33: Search Parameters

Domain

Estimation Pass

Search Distance

Minimum

Number of

Composites

Maximum

Number of

Composites

Maximum

Number of

Samples Per

Drill Hole

X

(m)

Y

(m)

Z

(m)

Slime

1

500

500

6

5

20

4

2

1,000

1,000

12

5

20

4

3

1,500

1,500

18

5

20

4

Source: The RVN Group, 2022

11.16.3 Technical and Economic Factors

The QP declared the Mineral Resource estimates for the Daggafontein TSF considering technical and

economic studies in Item 13 to Item 19.

The Daggafontein TSF's average gold grade is 0.24g/t, which is above the cut-off grade presented in

Table 11.2. Selective mining of the TSF is not practiced by Ergo, therefore a cut-off is not a block level

but it is for the entire TSF. If a TSF mean grade is above cut -off, it is considered for the Mineral Resource.

The QP’s opinion is that there is a reasonable prospect for economic extraction based on the total mix

of technical and economic factors discussed.

11.16.4 Mineral Resource Classification Criteria

A list of the criteria used to classify the Mineral Resources is given in Table 11.34 below. Applying these

confidence levels, Mineral Resource classification codes were assigned to the block model.

Table 11.34: Confidence Levels for Key Criteria for Mineral Resource Classification

Items

Discussion

Confidence

Drilling Techniques

RC drilling technique to international standards

High

Logging

Detailed logging throughout

High

Sub-sampling Techniques and

Sample Preparation

Material has previously been processed and quartering

was applied

High

Quality of Assay Data

Available data is of robust quality however there is a

relatively high variability in the lowest grade assays

High

Verification of Sampling and Assaying

Full QC program implemented during exploration

High

Location of Sampling Points

Survey of all collars and TSFs surfaces

High

Data Density and Distribution

Data points were well spread. No drilling under water

Moderate

(low for

underwater

material)

Database Integrity

Errors identified and rectified

High

Geological Interpretation

Geometry is known accurately

High

Bulk Density

A mean density of 1.42t/m

3

 was considered reasonable

High

Mineralization Type

Mineralization is well known from processing

High

Estimation and Modelling Techniques

NN, Inverse Distance and Ordinary Kriging

High

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

141

Where drill hole spacing is less than 250m, the material was classified as an Indicated Mineral Resource

(Figure 11.59). An Inferred Mineral Resource was defined for the area under water where drilling could

not be done and grades were estimated on the second pass i.e., up to 1,000m drilling space.

Figure 11.59: Mineral Resource Classification

Source: The RVN Group, 2022

11.16.5 Mineral Resource Statement

The Mineral Resource is stated in Table 11.35 and Table 11.36.

Table 11.35: Daggafontein TSF Mineral Resource Estimate (Inclusive)

TSF

Mineral

Resource

Category

Mineral Resources as 30 June 2021

(Inclusive)

Mineral Resources as at 30 June 2022

(Inclusive)

Tons

(kt)

Au

(g/t)

Content

(oz)

Tons

(kt)

Au

(g/t)

Content

(oz)

Measured Mineral Resources

-

-

-

-

-

-

Indicated Mineral Resources

192,793

0.24

1,487,625

192,793

0.24

1,487,625

Sub-total Measured and

Indicated Mineral Resources

192,793

0.24

1,487,625

192,793

0.24

1,487,625

Inferred Mineral Resources

21,318

0.24

164,494

21,318

0.24

164,494

Total Mineral Resources

214,111

0.24

1,652,119

214,111

0.24

1,652,119

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

142

Table 11.36: Daggafontein TSF Mineral Resource Estimate (Exclusive)

TSF

Mineral

Resource

Category

Mineral Resources as 30 June 2021

(Exclusive)

Mineral Resources as at 30 June 2022

(Exclusive)

Tons

(kt)

Au

(g/t)

Content

(oz)

Tons

(kt)

Au

(g/t)

Content

(oz)

Measured Mineral Resources

-

-

-

-

-

-

Indicated Mineral Resources

-

-

-

-

-

-

Sub-total Measured and

Indicated Mineral Resources

-

-

-

-

-

-

Inferred Mineral Resources

21,318

0.24

164,494

21,318

0.24

164,494

Total Mineral Resources

21,318

0.24

164,494

21,318

0.24

164,494

Source: The RVN Group, 2022

11.16.6 Mineral Resource Changes

There was no change in the Mineral Resource from June 2021 to June 2022 as no additional drilling or

studies were completed on the Daggafontein TSF.

11.16.7 Mineral Resource Risks and Uncertainty

The QP’s opinion is that the overall grade and tonnage estimates are reasonable for mine planning

based on the drill hole data and assay statistics. The Inferred portion of the Mineral Resource could not

be sufficiently drilled as this portion of the TSF remains saturated and its estimation was based on

extrapolation. This presents a low risk for preliminary feasibility or feasibility mine planning work, as no

Inferred Resource was included in an economic assessment.

The gold price fluctuations and lower grades present the main risk to the declared Mineral Resource.

Risks of grade and continuity of mineralization were mitigated through infill drilling, validation

procedures, metallurgical testing, advanced statistical analyses and the use of robust geological

modelling techniques.

The QP classified the overall Mineral Resource risk as low to medium. In the opinion of the QP, no further

technical work is required as the drilling program provided sufficient data to define continuity. No drilling

in the waterlogged area is recommended.

Technical Report Summary of the material Tailings Storage Facilities

143

11.17 Summary Mineral Resource Estimates

Table 11.37 presents the summary of the Mineral Resource estimates (inclusive) for the 18 TSFs and the

one sand dump. The Mineral Resource estimates are reported as inclusive of the Mineral Reserve and

the reference point is in situ.

Table 11.37: Inclusive Mineral Resources of the 19 Material Properties as at 30 June 2022

Complex

TSF/Sand Dump

Category

Mineral Resources as at 30 June

2021 (Inclusive)

Mineral Resources as at 30 June

2022 (Inclusive)

Tons

(kt)

Au

(g/t)

Content

(oz)

Tons

(kt)

Au

(g/t)

Content

(oz)

City Deep

4L3

Measured

13,134

0.32

135,126

13,134

0.32

135,126

4L4

Measured

4,738

0.32

48,746

4,738

0.32

48,746

4L6

Measured

2,410

0.31

24,020

2,410

0.31

24,020

Knights

4L14

Measured

6,638

0.29

61,891

6,638

0.29

60,824

4L50

Measured

6,756

0.26

56,475

3,418

0.26

27,216

Ergo

7L15

Measured

17,646

0.26

147,506

17,646

0.26

147,506

Rooikraal

Measured

56,763

0.26

474,493

56,763

0.26

474,493

Marievale

7L4

Measured

17,590

0.34

192,281

17,590

0.34

192,281

7L5

Measured

6,980

0.29

65,080

6,980

0.29

65,080

7L6

Measured

12,760

0.26

106,663

12,760

0.26

106,663

7L7

Measured

16,784

0.32

172,678

16,784

0.32

172,678

Grootvlei

6L17

Measured

49,320

0.26

412,275

49,320

0.26

412,275

6L17A

Measured

16,716

0.26

140,807

16,716

0.26

139,732

5A10/5L27

5A10/5L27

Measured

11,985

0.43

164,623

9,862

0.42

128,075

Sub-total Measured Mineral Resources

240,220

0.29

2,202,664

234,759

0.28

2,134,715

Grootvlei

6L16

Indicated

41,619

0.26

347,901

41,619

0.26

347,901

Daggafontein

Daggafontein

Indicated

192,793

0.24

1,487,625

192,793

0.24

1,487,625

Crown

Mooifontein

(3L7)

Indicated

67,559

0.23

499,577

67,559

0.23

499,577

GMTS (3L8)

Indicated

107,450

0.25

863,649

107,450

0.25

863,649

Diepkloof (3L5)

Indicated

97,988

0.23

724,589

97,988

0.23

724,589

Sub-total Indicated Mineral Resources

507,409

0.24

3,923,341

507,409

0.24

3,923,341

Sub-total Measured and Indicated Mineral

Resources

747,629

0.25

6,126,005

742,168

0.25

6,058,056

Daggafontein

Daggafontein

Inferred

21,318

0.24

164,494

21,318

0.24

164,494

Sub-total Inferred Mineral Resources

21,318

0.24

164,494

21,318

0.24

164,494

Total Material Mineral Resources

768,947

0.25

6,290,499

763,486

0.25

6,222,550

Source: The RVN Group, 2022

Notes:

i. Mineral Resources are not Mineral Reserves.

ii. Mineral Resources are reported inclusive of Mineral Reserves.

iii. Mineral Resources have been reported in accordance with Subpart 1300 of Regulation S-K

iv. Mineral Resources were estimated using the USD1,823/oz, ZAR15.60/USD, ZAR914,294/kg financial parameters and recoveries

in Table 11.2

v. A troy ounce = 31.1034768g

vi. Quantities and grades were rounded to reflect the accuracy of the estimates; and if any apparent errors are insignificant

Technical Report Summary of the material Tailings Storage Facilities

144

Table 11.38 presents exclusive Mineral Resource estimates for the material properties.

Table 11.38: Exclusive Mineral Resources of the 19 Material Properties as at 30 June 2022

Complex

TSF/Sand

Dump

Category

Mineral Resources as at 30 June

2021 (Exclusive)

Mineral Resources as at 30 June

2022 (Exclusive)

Tons

(kt)

Au

(g/t)

Content

(oz)

Tons

(kt)

Au

(g/t)

Content

(oz)

City Deep

4L3

Measured

-

-

-

-

-

-

4L4

Measured

-

-

-

-

-

-

4L6

Measured

-

-

-

-

-

-

Knights

4L14

Measured

-

-

-

-

-

-

4L50

Measured

-

-

-

-

-

-

Ergo

7L15

Measured

-

-

-

-

-

-

Rooikraal

Measured

-

-

-

-

-

-

Marievale

7L4

Measured

-

-

-

-

-

-

7L5

Measured

-

-

-

-

-

-

7L6

Measured

-

-

-

-

-

-

7L7

Measured

-

-

-

-

-

-

Grootvlei

6L17

Measured

-

-

-

49,320

0.26

412,275

6L17A

Measured

-

-

-

16,716

0.26

140,807

5A10/5L27

5A10/5L27

Measured

-

-

-

-

-

-

Sub-total Measured Mineral Resources

-

-

-

66,036

0.26

553,082

Grootvlei

6L16

Indicated

41,619

0.26

347,901

41,619

0.26

347,901

Daggafontein

Daggafontein

Indicated

192,793

0.24

1,487,625

-

-

-

Crown

Mooifontein

(3L7)

Indicated

67,559

0.23

499,577

67,559

0.23

499,577

GMTS (3L8)

Indicated

107,450

0.25

863,649

107,450

0.25

863,649

Diepkloof

(3L5)

Indicated

97,988

0.23

724,589

97,988

0.23

724,589

Sub-total Indicated Mineral Resources

507,409

0.24

3,923,342

314,616

0.24

2,435,716

Sub-total Measured and Indicated Mineral

Resources

507,409

0.24

3,923,342

380,652

0.24

2,988,798

Daggafontein

Daggafontein

Inferred

21,318

0.24

164,494

21,318

0.24

164,494

Total Inferred Mineral Resources

21,318

0.24

164,494

21,318

0.24

164,494

Total Material Mineral Resource

528,727

0.24

4,087,835

401,970

0.24

3,153,292

Source: The RVN Group, 2022

Notes:

i. Mineral Resources are not Mineral Reserves.

ii. Mineral Resources are reported exclusive of Mineral Reserves.

iii. Mineral Resources have been reported in accordance with Subpart 1300 of Regulation S-K

iv. Mineral Resources were estimated using the USD1,823/oz, ZAR15.60/USD, ZAR914,294/kg financial parameters and recoveries

in Table 11.2

v. A troy ounce = 31.1034768g

vi. Quantities and grades were rounded to reflect the accuracy of the estimates; and if any apparent errors are insignificant

Technical Report Summary of the material Tailings Storage Facilities

145

The total Mineral Resource Estimates for Ergo are presented in Table 11.39 and Table 11.40. The total

Mineral Resource consisted of 19 material properties and 79 small TSFs and clean-up sites. The changes

in Mineral Resource from June 2021 to June 2022 are due to depletion of 20.48Mt at

0.33g/t Au and minor survey adjustments of 2.94Mt at 0.20g/t Au as presented on Figure 11.60.

Table 11.39: Ergo Inclusive Mineral Resources Statement as at 30 June 2022

Mineral Resources

Classification

Mineral Resources as at 30 June 2021

(Inclusive)

Mineral Resources as at 30 June 2022

(Inclusive)

Tons

(Mt)

Au

(g/t)

Content

(Moz)

Tons

(Mt)

Au

(g/t)

Content

(Moz)

Measured Mineral Resources

282.95

0.31

2.81

266.25

0.31

2.64

Indicated Mineral Resources

574.95

0.25

4.61

568.21

0.25

4.55

Sub-total Measured and

Indicated Mineral Resources

857.90

0.27

7.42

834.45

0.27

7.19

Inferred Mineral Resources

21.32

0.24

0.16

21.32

0.24

0.16

Total

Mineral Resources

879.22

0.27

7.58

855.77

0.27

7.35

Source: The RVN Group, 2022

Table 11.40: Ergo Exclusive Mineral Resources Statement as at 30 June 2022

Mineral Resources

Classification

Mineral Resources as at 30 June 2021

(Exclusive)

Mineral Resources as at 30 June 2022

(Exclusive)

Tons

(Mt)

Au

(g/t)

Content

(Moz)

Tons

(Mt)

Au

(g/t)

Content

(Moz)

Measured Mineral Resources

-

-

-

66.04

0.26

0.55

Indicated Mineral Resources

574.95

0.25

4.61

375.41

0.25

3.02

Sub-total Measured and

Indicated Mineral Resources

574.95

0.25

4.61

441.45

0.25

3.57

Inferred Mineral Resources

21.32

0.24

0.16

21.32

0.24

0.16

Total

Mineral Resources

596.27

0.25

4.77

462.77

0.25

3.77

Source: The RVN Group, 2022

Technical Report Summary of the material Tailings Storage Facilities

146

Figure 11.60: Mineral Resource Reconciliation (Inclusive)

Source: The RVN Group, 2022

11.18 QP’s Opinion

In the QP’s opinion, all relevant technical and economic factors that may likely affect the prospects of

economic extraction, were adequately considered for the Mineral Resources reported. The QP

recommended no further work.

Technical Report Summary of the material Tailings Storage Facilities

147

12 Mineral Reserve Estimates

This Item includes discussion and comments on the conversion of Mineral Resources to Mineral Reserves.

Specifically, comments are provided on the key assumptions, parameters and methods (modifying

factors) used to estimate the 30 June 2022 Mineral Reserve.

Mineral Reserves estimates are affected by multiple factors that change over time. Fluctuations in the

gold price, exchange rates, legislation in the operating country, other reporting jurisdictions and a wide

range of operating conditions may affect the Mineral Reserve estimates. Estimates of the Mineral

Reserves should be considered best estimates at the time of reporting.

The level of the study conducted to support the declaration of the 30 June 2022 Mineral Reserve is based

on a mine plan and design conducted to a PFS level of accuracy (i.e., +/-25%) with a maximum level

of contingency of 15%. Ergo utilizes Measured and Indicated Mineral Resources incorporated into the

LoM plan. No Inferred Mineral Resources have been used in the LoM plan.

12.1 Grade Control and Reconciliation

The Ergo LoM plan and schedule for the individual TSFs is based on 3-D geological models, which

provides grade, density, and volume for each individual block. The planning department takes this

information and establishes a grade for the proposed mining cut, typically in the order of 15m. The mine

plan accounts for each block, resulting in a tonnage and grade estimate for the entire mining block or

mining cut. The mining cut is then sequenced and scheduled.

Ergo conducts grade and tonnage reconciliations on a quarterly basis with no material difference

between the planned and actual grade and tonnages observed.

Table 12.1: Reconciliation of RoM Head Grade (Au)

Year

Plan RoM Head

Grade

(g/t)

Actual RoM Head

Grade

(g/t)

Head Grade

Difference

(g/t)

Percentage

Difference

(%)

2019/2020

0.358

0.354

-0.003

-1.13%

2020/2021

0.354

0.363

0.009

2.54%

2021/2022

0.347

0.366

0.018

5.19%

Source: The RVN Group, 2022

Table 12.2: Reconciliation of RoM Tonnage

Year

Measured Survey

Tonnage

(kt)

Processing Plant

Tonnage

(kt)

Tonnage

Difference

(kt)

Percentage

Difference

(%)

2019/2020

20 265

20 086

-179

-0.9%

2020/2021

22 884

22 949

66

0.7%

2021/2022

22 810

21 553

-1 527

-6.7%

Source: The RVN Group, 2022

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The above results (Table 12.1 and Table 12.2) indicate no material difference between the planned and

actual grade and planned and actual tonnages for years 2019/20 and 2020/21. However, the 2021/22

reconciliation between planned and actual grade indicates a 5.2% increase in the gold grade (0.35g/t

versus 0.37g/t). Further, the reconciliation showed a 6.7% decrease in the planned tonnage during the

same period. The higher grade is associated with mining some mineralized material not in the mine plan

nor in the Mineral Reserve, which was mined at a higher grade than anticipated. The decrease in the

tonnage was due to power issues at Knights section. Knights was negatively affected by load shedding

(scheduled and unscheduled power cuts). Ergo is addressing this issue by introducing back-up power

generators and installing a power cable from City Deeps to supply Knights with power from Eskom rather

than City Power. The supply of Eskom power will result in advised power reduction rather than power

cuts without any warning, which was the case with City Power.

12.2 Cut-off Grade Estimation

The cut-off grade, for the purposes of the Mineral Reserve definition, is defined as the grade at which

the value of the contained metal in a unit quantity is equivalent to the cost of its production, i.e., the

breakeven grade.

Cut-off Grade

=

Total On-Mine Production Costs

(Metal Market Price

–

 Off-Mine Costs) x Recovery

The gold price and other operational inputs are discussed in various Items of this Report; plant recoveries

are reviewed in Item 14, Item 16 reports on marketing and pricing, and operating costs are commented

on in Item 18. The cut-off grade and Mineral Reserve grades for the source areas are provided in Table

12.3. Note that due to the nature of mining TSFs, the cut-off grade is not based on a block value or

individual sections of the TSF but based on the total TSF (i.e., if the entire TSF grade is above the cut-off

grade, the TSF will be mined.

Table 12.3: Cut-off Grade and Mineral Reserve Grades

Source Area

Plant Recovery

(%)

Cut-off Au Grade

(g/t)

Mineral Reserve Au Grade

(g/t)

Ergo

40,87

0.24

0.28

Source: The RVN Group, 2022

Notes:

1. The cut-off grade provided above is based on the June 2022 LoM plan and used to validate the 30 June 2022 Mineral Resource and

Mineral Reserve estimation.

2. Gold price ZAR914,294/kg (Item 16).

3. On-mine cost ZAR90.86/t (Item 18).

4. Off-mine cost ZAR0.00/t.

The various modifying factors i.e., mining, metallurgical, processing, infrastructure, economic, marketing,

legal, environmental, and governmental factors are discussed in Item 13 to Item 19

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12.3 Estimation and Modelling Techniques

Ergo reports its Mineral Resources and Mineral Reserves in accordance with the Regulation S-K 1300. In

no case has Measured Mineral Resources been downgraded to a Probable Mineral Reserve category.

Other than geological modelling, no other modelling or estimation techniques are used in the selection

of Mineral Reserves. Selection for inclusion in the Mineral Reserves is based on the average grade of the

TSF being above the required cut-off grade.

The following comments are relevant in the conversion of Mineral Resources to Mineral Reserves:

●

there is no mining dilution, as each of the TSFs is to be mined and processed in their entirety;

●

no allowance has been made for mining losses; and

●

a LoM plan has been generated , reviewed and tested for economic viability in a discounted

cash flow (DCF) model. Cognizance has been taken of the geotechnical considerations

regarding the safety of the operation and long-term stability of the TSF walls, and the working

considerations are based on operational practices as provided by Fraser Alexander (Proprietary)

Limited, a tailings design, management and mining company.

12.4 Mineral Reserve Classification Criteria

The Mineral Reserve classification of Proven and Probable is a function of the Mineral Resource

classification with due considerations of the minimum criteria for the

“

modifying factors

”

 as

considered in the S-K1300. In no case has Measured Mineral Resources been downgraded to a Probable

Mineral Reserve Category.

Due to the length of approval times for the renewal of permits, some of the Mineral Reserves may be

based on permits (approvals) still in the process of being renewed. At this time, there is no indication

that these renewals will not be granted and therefore have been used in the LoM plan and Mineral

Reserve statement.

12.5 Mineral Reserves Statement

Mineral Reserves are based on the 30 June 2022, LoM plan and schedule. The Ergo Mineral Reserve

statement as at 30 June 2022 is provided in Table 12.4 along with the previous Mineral Reserves as at 30

June 2021.

The QP confirms that the Mineral Reserve statement presented in Table 12.4 is disclosed in accordance

to the S-K1300 guidelines.

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Table 12.4: Ergo TSF Mineral Reserves Statement as at 30 June 2022

Mineral Reserve

Classification

Mineral Reserves as at 30 June 2021

Mineral Reserves as at 30 June 2022

Tons

(Mt)

Au

(g/t)

Contents

(Moz)

Tons

(Mt)

Au

(g/t)

Contents

(Moz)

Proven

29.36

0.295

0.28

200.21

0.33

2.09

Probable

253.59

0.311

2.53

192.79

0.24

1.49

Total Mineral Reserves

282.95

0.309

2.81

393.00

0.28

3.58

Source: The RVN Group, 2022

Notes:

1. Tons and grades were rounded, and this may result in minor adding discrepancies.

2. The Mineral Reserve has been reported in accordance with the classification criteria defined in the Regulation S-K 1300.

3. The Mineral Reserve is estimated using the USD1,823/oz, ZAR15.60/USD and ZAR914,294ZAR/kg financial parameters.

4. No mining losses or dilution has been applied in the conversion process nor has a mine call factor been applied.

5. Tonnage and grade RoM delivered to the processing plant.

6. The attributable Mineral Reserve is 100% of the total Mineral Reserve.

The QP responsible for the reporting and sign-off of the Mineral Reserve is Professor Steven Rupprecht.

Professor Rupprecht is a Fellow of the Southern African Institute of Mining and Metallurgy (SAIMM) with

more than five years of experience relevant to the evaluation and reporting of TSF Mineral Reserves.

Table 12.5 depicts the Mineral Reserve reconciliation between 30 June 2021, and 30 June 2022. Some

20.48Mt was depleted through mining operations; 66.04Mt was removed from the Mineral Reserve by

the removal of the Grootvlei TSFs from the LoM plan; 2.94Mt was subtracted due to survey adjustments,

and a further 192.79Mt added to the LoM plan with the inclusion of the Daggafontein TSF and 6.72Mt

for additional TSFs upgraded from Indicated Mineral Resources to the Probable Mineral Reserve

category. Based on the above, a total tonnage of 110.06Mt has been added, resulting in a 30 June

2022 Mineral Reserve of 393.00Mt at a grade of 0.28g/t.

Table 12.5: Mineral Reserve Reconciliation

Source

Tons

(Mt)

Au Grade

(g/t)

Content

(Moz)

Mineral Reserve as at 30 June 2021

282.95

0.31

2.81

Depletion through Mining Operations

(20.48)

0.33

(0.22)

Survey Adjustment

(2.94)

0,20

(0.01)

Inclusion of Daggafontein TSF in the LoM Plan

192.79

0.24

1.49

Exclusion of a Grootvlei TSF

(66.04)

0.26

(0.55)

Inclusion of 4 TSFs in the LoM Plan

6.72

0.26

0.06

Mineral Reserve as at 30 June 2022

393.00

0.28

3.58

Source: The RVN Group, 2022

Note: Quantities and grades have been rounded to two decimal places, therefore minor computational errors may occur.

The various modifying factors, i.e., mining, metallurgical, processing, infrastructure, economic,

marketing, legal, environmental, and governmental factors, will be discussed in the following Items of

this Report.

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12.6

QP Statement on the Mineral Reserve Estimation

The Mineral Reserves declared are estimated from the 30 June 2022 LoM plan which was developed for

the Ergo operations and is based on the Mineral Resource Estimates as at 30 June 2021, depleted to 30

June 2022 together with a set of modifying factors based on recent operational results, and economic

inputs provided by Ergo. The assumptions applied in determining the modifying factors and economic

inputs are reasonable and appropriate. The LoM plan is in sufficient detail to ensure achievability and is

based on historical achievements. All the inputs used in the estimation of the Mineral Reserves have

been thoroughly reviewed and can be considered technically robust.

Apart from the Marievale Complex (a low to medium risk due to ownership issues), the QP applies a low

risk to the Mineral Reserves but acknowledges there are several external factors that can impact on

Mineral Reserves, such as infrastructural, marketing, financial, environmental, social and governmental

aspects.

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13 Mining Methods

Ergo’s business is the retreatment of old gold bearing sand dumps and slimes dams (termed TSFs) to

recover gold. Consequently, Ergo has acquired an extensive inventory of gold bearing sand and slimes

TSFs spread across the Central and East Rand goldfields produced from the historical processing of gold

ores of the Witwatersrand Supergroup, by the gold mines that operated across the gold fields. These

mines are now mostly defunct and stretch from the Crown, City Deep and Knights processing plants in

the Central Rand to the south of Johannesburg to the Grootvlei Mine in the East Rand over some 70km.

The result of Ergo’s retreatment is the creation of a ‘new’ TSF, which tailings are deposited on a mega

TSF (Brakpan/Withok TSF) designed to modern standards. In this way, Ergo plays a dual role in creating

value and cleaning up the environment.

Ergo consists of the processing plant and pipeline infrastructure, the mining rights, licenses and permits

to access a large number of surface Mineral Resources (old tailings, slimes and sand dumps) and the

active Brakpan/Withok TSF.

Table 13.1 indicates Ergo’s historical operation results. The results show that since 2017 Ergo has declined

from nearly 25Mtpa to 21.5Mtpa. During the 2020 and 2021 financial years (FYs), production was

adversely affected by the Covid-19 pandemic and in 2022 was influenced by power restrictions (load

shedding). The 2022 tonnage profile was also lower due to a deliberate decision by management to

mine higher grade material as part of a clean-up operation which in turn sacrificed low grade volume.

Although operational tonnage was lower than planned, operational performances were boosted by a

higher gold price received for FY2022 (ZAR894,409/kg), FY2021 (ZAR917,996/kg) and FY2020

(ZAR768,675/kg) reporting robust net cashflows. Ergo has adjusted the planned RoM tonnage in the 2022

LoM plan targeting about 22Mtpa in the short to medium term and 21.6Mtpa in the longer term.

Table 13.1: Historical Ergo Operational Results

Year

FY2022

FY2021

FY2020

FY2019

FY2018

FY2017

Tonnage (t) ('000)

21,111

22,952

20,228

23,162

24,281

24,958

Gold Produced (kg)

4,156

4,263

3,989

4,493

4,679

4,265

Yield (g/t)

0,188

0,186

0,197

0,194

0,193

0,171

Source: DRDGOLD, 2022

13.1 Mining Method

The current mining methods applied by Ergo are suitable for all TSFs (dumps) (Figure 13.1). No selective

mining will occur with the entire TSF being processed. No selective mining is the result of four conditions

inherent in the DRDGOLD operation of reclaiming the dumps:

●

there is nowhere on the mining sites to dump the below cut-off grade material;

●

the mining method is not conducive to selective mining; and

●

the operation is a rehabilitation exercise, and all mineralized material must be removed from the

site, and it is, therefore, economically beneficial to process all material, even low-grade material.

●

Concurrent rehabilitation takes place which reduces the environmental impact as well as the

rehabilitation liabilities

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Figure 13.1: Typical Tailing Storage Facility

Source: DRDGOLD, 2022

13.1.1 Hydraulic Mining

The use of water plus energy to mine unconsolidated material has a long history. Documented and

physical evidence indicates widespread and sophisticated use in the Californian goldfields in the mid-

19th century. Thousands of kilometers of ditches and flumes were constructed to gravitate water from

the mountains to generate sufficient pressure to “flush” the alluvial gravel beds into sluices. In recent

years, however, the most popular techniques have been based on hydraulic mining used to mine

unconsolidated materials, alluvial deposits, freshly blasted ores and for the recovery (or mining) of

dewatered TSFs.

Hydraulic mining is loosely defined as excavating material from its in situ state using water. A stream of

water is directed at the mining face to mechanically breaking and/or softening the material so that the

water flow can carry it away. The application or effectiveness of the method is a function of various

factors ranging from the size, velocity and pressure of the water stream to the location, hardness,

particle size and moisture content of the material to be mined.

Hydraulic mining is typically undertaken using 100mm or 150mm monitor guns (Figure 13.2), with

increased production achieved by including additional units. Hydraulic mining provides a high degree

of flexibility that allows simultaneous mining at several points over a wide range of production rates.

Consequently, grade blending is readily achievable.

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Figure 13.2: Example of Hydraulic Mining

Source: DRDGOLD, 2022

Hydraulic mining in semi or near-saturated conditions is possible and common and has a clear

advantage over load-and-haul operations. Hydraulic mining does not create, but rather ameliorate the

airborne dust problem often associated with fine TSFs and dry mining techniques. A typical generic

hydraulic mining system is shown in Figure 13.3.

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155

Figure 13.3: Hydraulic Mining Process Diagram

Source: J Engels, No Date

Note: the pumps have been excluded for clarity

The planning of hydraulic mining considers several factors:

●

the required production rate;

●

the life of the operation;

●

the type of material to be mined (including hardness, density, grading, specific gravity, degree

of contamination (vegetation));

●

the site topography, shape and form of the TSF;

●

the slurry quality requirements;

●

the pumping distances; and

●

water, power, equipment and labor availability.

Considering the abovementioned aspects allows the size and number of monitor guns to be

determined. Essentially, most applications require 1m

3

 of water per dry ton to be mined aiming for 50%

solids. A monitor gun can be fitted with different diameter nozzles (100mm or 150mm) that allow

production rates to be “fine-tuned”.

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156

Before the slurry enters the pumping facilities, it is usually necessary to pass the slurry through a screen

or series of screens depending upon the degree of contamination and oversize. Satellite pumps

transport slime into a thickener or header tank ahead of the processing plant that accommodates

surges in flow, grading or density.

Hydraulic mining provides slurry feedstock to the mineral processing plant continuously. To maintain

production, high pressure water must be ensured. Slurry densities and production rates will not be

achieved if the water pressure is not maintained. Critical to hydraulic mining is consistent high slurry

densities. If densities drop, less tonnage is delivered to the processing plant, thus increasing the mining

cost. Figure 13.4 demonstrates a cross-sectional view of mining a TSF.

Figure 13.4: Typical Mining Method for a TSF

Source: DRDGOLD, 2018

13.1.2 Conventional Load, Haul and Slurry

A second mining method employed by Ergo is the use of front-end loaders (FEL) to load slimes and sand

(Figure 13.5). In these cases, the FELs load from the bottom of the dump and transport the mineralized

material to a feed hopper which feeds a conveyor. The conveyor transports (Figure 13.6 to Figure 13.8)

the mineralized material to the satellite pump station where it is mixed with water to form a slurry then

pumped to the processing plant. In other cases, the FELs load directly onto trucks for transport to the

processing plant.

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Figure 13.5: Example of Loading with a FEL

Source: DRDGOLD, 2022

Figure 13.6: Example of Loading with a FEL into a Hopper

Source: DRDGOLD, 2022

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158

Figure 13.7: Example of Material on Conveyor

Source: DRDGOLD, 2022

Figure 13.8: Slurry Point for Loading

Source: DRDGOLD, 2022

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159

13.2 Mining Sections

Ergo re-treats slimes and sand dumps from three sections, as depicted in Figure 13.9, the West Section,

Central Section, and the East Section. Figure 13.10 provides an overview of the Ergo operations and

pipelines from the West Rand to East Rand.

In terms of the LoM plan and the Mineral Reserve statement, the following TSFs are considered material

for Ergo:

●

4L3 (13.1Mt);

●

Rooikraal TSF (56.8Mt);

●

7L15 TSF (17.1Mt);

●

Marievale Complex (54.1Mt); and

●

Daggafontein TSF (192.8Mt).

The following TSFs, excluding the material TSFs listed above, are reported on an aggregate basis, as they

are included in the LoM plan and cumulatively make the Ergo operation economically viable.

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Figure 13.9: Ergo Sections

Source: DRDGOLD, 2022

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Figure 13.10: Ergo Operations Overview

Source: DRDGOLD, 2022

Note: overview purposes only

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162

13.2.1 West Rand

No Mineral Reserve was declared.

13.2.2 Central Rand Section – City Section

Mining areas located from Soweto to City Deep are planned to be loaded and hauled to the City

Deep Basin or alternatively 4L25. Slurry is pumped from the City Deep Basin via a 600ktpm (500mm

NB pipe) pipeline to the Ergo processing plant. Operations from the City Section are planned to

be completed in September 2027 and the Knights Section will be completed in June 2024.

Table 13.2 and Table 13.4 depict the working places in the Central Rand that are included in the

LoM plan and include sites that are being mined on a contract basis and not included in the

Mineral Reserve.

Table 13.2: Central Rand (City Section)

Workplace

Tonnage

(kt)

Grade

AU

(g/t)

Recovery

(%)

Steady State

Mining Rate

(ktpm)

Commentary

3L1 Sand and 3A1

201

0.63

64.1

20

Mined in 2026

3L40

204

0.30

46.0

50

Mined in 2022 to 2023

4L42

300

0.30

46.0

75

Mined in 2022

3L43

150

0,45

52.7

50

Mined in 2022

4L2

252

0.30

46.0

100

Mined in 2022 to 2023

4L25 LG

1 518

0.31

46.1

150

Mined in 2022 to 2023

4L3

13,134

0.32

45.9

320

Mined in 2022 to 2026

4L4

4,738

0.31

47.8

140

Mined in 2023 to 2027

4L6

2,410

0.60

44.2

140

Mined in 2023 to 2024

3L30 Rob Deep Slime

216

0.60

73.3

40

Mined in 2022

3L30 Rob Deep Sand

15

1.00

62,5

20

Mined in 2022 to 2023

(Rehabilitation)

Valley Silts

3,760

0.60

64.9

80

Mined in 2022 to 2026

Genesis (3A11)

164

0.42

62.5

50

Contract-Mined in 2022

Cons Dump Cluster

794

0.63

51.4

65

Contract-Mined in 2026

Total

27,856

Source: The RVN Group, 2022

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Table 13.3: Central Rand (Knights Section)

Workplace

Tonnage

(kt)

Grade

Au

(g/t)

Recovery

(%)

Steady State

Mining Rate

(ktpm)

Commentary

4A18 - E and S Sand

130

0.60

62.2

10

Mined in 2022

4A18 - 4A30 Sand

204

0.50

55.2

17

Mined in 2022

4A18 -4A19 Sand

216

0.60

62.2

18

Mined in 2022

4A18 - 4L13 Sand

46

0.60

62.3

10

Mined in 2022

4A18 - BGM Dumps

Sand

2,256

0.60

62.8

34

Contract - Mined in 2022

4A18 - Benoni Cluster

Sand

1,200

0.56

59.6

60

Mined in 2023 to 2024

Consolidated Dumps

via 5/L/27

645

0.38

41.0

80

Mined in 2024

4L18 -Ezekiel

130

0.40

43.5

20

Mined in 2022

4L18 - 4L19 Slime

292

0.65

65.2

40

Mined in 2022

4L18 - 4L8 Slime

120

0.48

52.9

15

Mined in 2022

4L18 - Primrose Slime

398

0.60

62.3

40

Mined in 2023 to 2024

Cedar and 50/50

350

0.36

37.7

40

Mined in 2023 to 2024

Cason Slime and

Lycast Clean-up

50

0.63

64.2

15

Mined in 2022

Cedar and 50/50

881

0.47

52.3

100

Mined in 2022

Total

6,919

Source: The RVN Group, 2022

13.2.3 East Rand Section

Table 13.4 indicates the TSF planned working sites located in the East Rand - Ergo Section,

including sites that are being mined on a contract basis, and not included in the Mineral Reserve.

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Table 13.4: East Rand Section (Ergo Section)

Workplace

Tonnage

(kt)

Grade

(g/t)

Recovery

(%)

Steady State

Mining Rate

(ktpm)

Commentary

4L14

6,638

0.28

48.1

270

Mined 2023 to 2025

4L30

3,512

0.33

48.0

270

Mined 2022 to 2024

4L39

9,008

0.42

54.3

360

Contract - Mined 2023 to

2025

4L40

2,281

0.27

44.4

300

Contract -Mined 2025 to

2026

Cons Dump Benoni

1,912

0.48

63.5

50

Contract - Mined 2024 to

2027

4L50 Elsburg

3,418

0.26

39.5

280

Plan Finish in 2023

4L49 Elsburg

290

0.26

41.3

290

Mined 2023

4L47 Elsburg

3,219

0,26

41.3

270

Site clean up

Benoni Slime

500

0.34

43.8

130

Mined 2023

5A10

975

0,61

65.0

70

Completed in 2022

5L27

3,829

0.40

64.9

140

Mining 2022 to 2026

5L27 Sand

4,288

0.28

60.0

140

Mining 2026 to 2028

5L27 Scoops Slime

1,155

0.60

67.9

100

Contract - Mined 2022 to

2023

5L27 Pipeline

1,002

0.60

62.8

90

Mined to 2024 to 2025

5L29 van Dyk

2,355

0.26

42.3

220

Mined to 2023

6L13

2,874

0.60

58.3

240

Mined 2028 to 2029

6L14

6,980

0.32

50.0

291

Mined 2027 to 2029

7L15

17,646

0.26

42.9

600

Mined 2027 to 2033

Rooikraal

56,763

0.26

34.2

380

Mined 2023 to 2034

Marievale 7L4

17,590

0.34

46.0

750

Mined 2025 to 2027

Marievale 7L5

6,980

0.29

47.4

750

Mined 2027 to 2029

Marievale 7L6

12,760

0.26

41.3

350

Mined 2029 to 2031

Marievale 7L7

16,784

0.32

40.9

550

Mined 2028 to 2031

Daggafontein

192,800

0.24

35.0

1,800

Mined 2031 to 2041

Total

375,559

Source: The RVN Group, 2022

13.3 Mine Design and Schedule

The technical work/studies conducted by Ergo to support the conversion of Mineral Resources

to Mineral Reserves and to generate the on-going LoM plan are at least to a PFS level of

accuracy (i.e., +/-25%). The LoM schedule mines approximately 21Mtpa from several TSF sites.

Table 13.5 provides the modifying factors used to convert the Mineral Resources to a Mineral

Reserve used in the 19-year LoM plan. Due to the nature of mining tailings and slimes TSFs, no

mining loss or dilution is applied in the conversion process. Recovery factors are based on

actual plant performances, which are reconciled annually.

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Table 13.5: Summary of Modifying Factors for LoM Plan

Source Area/Plant

MCF

(%)

LoM Recovery

(%)

Mining Loss

(%)

Dilution

(%)

Total Ergo Operation

100

40.9

0

0

Source: The RVN Group, 2022

Note: Tailing recoveries vary on a TSF-by-TSF basis

Table 13.6 provides the 30 June 2022 19-year LoM tonnage and recovered gold schedule used

to support the declaration of the Mineral Reserve. The LoM plan has a cut-off grade of 0.24g/t

Au, which is below the planned LoM head grade of 0.28g/t Au. The working cost of ZAR90.86/t

is based on the LoM plan. The current LoM plan is very robust. However, it remains sensitive to

RoM grade, gold price, exchange rate, recovery and operating costs.

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Table 13.6: Ergo Forecast Production from July 2021 to June 2034

Years

1

2

3

4

5

6

7

2022 to 2023

2023 to 2024

2024 to 2025

2025 to 2026

2026 to 2027

2027 to 2028

2028 to 2029

Tons

(kt)

Recovered

Au

(kg)

Tons

(kt)

Recovered

Au

(kg)

Tons

(kt)

Recovered

Au

(kg)

Tons

(kt)

Recovered

Au

(kg)

Tons

(kt)

Recovered

Au

(kg)

Tons

(kt)

Recovered

Au

(kg)

Tons

(kt)

Recovered

Au

(kg)

Sand

3,409

1,380

4,684

1,767

2,560

1,116

2,450

885

2,615

839

1,549

605

720

466

Slime

19,501

2,760

18,290

2,873

19,020

2,873

18,038

2,437

19,340

2,628

19,479

2,486

20,200

2,479

Total

22,910

4,141

22,974

4,561

21,580

3,988

20,488

3,322

21,955

3,467

21,028

3,091

20,920

2,945

Years

8

9

10

11

12

13

14

2029 to 2030

2030 to 2031

2031 to 2032

2032 to 2033

2033 to 2034

2034 to 2035

2035 to 2036

Tons

(kt)

Recovered

Au

(kg)

Tons

(kt)

Recovered

Au

(kg)

Tons

(kt)

Recovered

Au

(kg)

Tons

(kt)

Recovered

Au

(kg)

Tons

(kt)

Recovered

Au

(kg)

Tons

(kt)

Recovered

Au

(kg)

Tons

(kt)

Recovered

Au

(kg)

Sand

720

466

720

466

720

466

515

333

0

-

0

-

0

-

Slime

21,145

2,727

21,599

2,555

21,585

1,979

21,600

1,852

21,703

1,854

21,600

1,814

21,600

1,814

Total

21,865

3,193

22,319

3,021

22,305

2,445

22,115

2,185

21,703

1,854

21,600

1,814

21,600

1,814

Years

15

16

17

18

19

Total

2036 to 2037

2037 to 2038

2038 to 2039

2039 to 2040

2040 to 2041

Tons

(kt)

Recovered

Au

(kg)

Tons

(kt)

Recovered

Au

(kg)

Tons

(kt)

Recovered

Au

(kg)

Tons

(kt)

Recovered

Au

(kg)

Tons

(kt)

Recovered

Au

(kg)

Tons

(kt)

Recovered

Au

(kg)

Sand 

0

-

0

-

0

-

0

-

0

-

20,662

8,788

Slime

21,600

1,814

21,600

1,814

21,600

1,814

21,600

1,814

18,572

1,560

389,672

41,870

Total

21,600

1,814

21,600

1,814

21,600

1,814

21,600

1,814

18,572

1,560

410,334

50,658

Source: The RVN Group, 2022

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13.4 Geotechnical and Geohydrology

The Witwatersrand TSFs have been successfully and economically exploited for some time, and the

geotechnical and geohydrology characteristics are well understood from practical experience. A safe

bench height is dependent upon the material being mined and is also influenced by the phreatic

surface within the dump. No geotechnical or hydrological risks surrounding Ergo’s operations have been

identified that would impact the declaration of a Mineral Reserve. As no open pit mining is taking place,

the mine design does not account for slope angles but rather the natural angle of repose from hydraulic

mining. To ensure the competency of the wall, an angle of 45

˚

 is used for mining.

No geotechnical or hydrological aspects affecting the surface deposits are significant to the operation

and the QP is unaware of any incidents regarding unexpected highwall failure.

Mining bench heights are in the order of 15m.

Hydraulic mining provides slurry feedstock to the processing plant continuously. To maintain production,

high pressure water must be ensured. Slurry densities and production rates will not be achieved if the

water pressure is not maintained. Critical to hydraulic mining is consistent high slurry densities. If densities

drop, less tonnage is delivered to the processing plant, thus increasing the unit mining cost.

The following series of steps offer an overview of the hydraulic mining process:

●

the water monitor washes the slime material between 10m to 15m high benches with a mining

width of 15m and a length of 9m or more (“mining cut”);

●

monitoring will be conducted from the bench of the TSF (i.e., top-down approach);

●

the resulting slurry stream is channeled in the 15m wide mining cut, which forms a trough to

ensure a good flow of the slurry material to the pumps, which will then transport the slurry to the

processing plant; and

●

approximately 6,950t/d (316tph) per water monitor is achievable equating to four hydraulic

monitors to produce 600ktpm.

The operating position of the monitor will be on the top of the mining cut and operating at a 45

˚

 angle,

as seen in Figure 13.11. The reclamation gun position and bench angles are based on experience and

on-site observations.

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Figure 13.11: Hydraulic Mining with Monitor showing Distance and Angle

Source: DRDGOLD; and The RVN Group, 2022

When FELs are used, care is taken to ensure that there is no undermining of the dump highwall with

operators being cognizant of the risks related to slumping highwalls. Dozers are used to remove over

hanging material where required. No geotechnical or hydrological aspects affecting the surface

deposits are significant to the operation and the QP is unaware of any incidents regarding unexpected

highwall failure.

13.5 Requirements for Stripping

As no underground mining is done, there is no underground development and backfilling required.

Other than minimal precleaning with a dozer of the top of the TSFs no pre-stripping is required at Ergo.

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13.6 Mining Equipment and Personnel Requirements

The equipment required for hydraulic mining are as follows:

●

track mounted hydraulic monitors;

●

water columns, 250mm diameter pipes to feed water to the hydraulic monitor;

●

grizzly screen to remove debris from slurry;

●

satellite pump stations (spindle pumps) to pump slurry to main pump station; and

●

main transfer pump station.

For loading of sand, excavators, dozers, FELs, trucks and conveyors are required as shown in

Item 13.2.2.

Ergo employs 776 full time employees and 1,628 special service providers, with service providers

deployed mostly in security, reclamation, and tailings deposition.

13.7 Mine Plans

13.7.1 Introduction

The QPs have identified the material TSFs in the Mineral Resource and Mineral Reserve.

In terms of the LoM plan and the Mineral Reserve statement, the following TSF are considered material

for Ergo:

●

4L3 (13.1Mt);

●

Rooikraal TSF (56.8Mt);

●

7L15 TSF (17.1Mt);

●

Daggafontein (192.8Mt); and

●

Marievale Complex (54.1Mt).

13.7.2 Central Rand

The 4L3 TSF accounts for 13.1Mt and is considered material to Ergo. The 4L3 TSF has commenced mining

operations in 2022 achieving a steady state mining rate of 3.2Mtpa and is completed in 2026.

13.7.3 East Rand (Ergo)

The Rooikraal TSF is scheduled to commence mining in 2023 and completes mining operations in 2034

Rooikraal starts up at 4.5Mt in 2023, with steady state production of 5.4Mt between 2027 and 2033. The

final year produces 4.4Mt as the remnant of the TSF is removed.

Mining of the Marievale Complex is scheduled to commence in 2025, starting with the mining of the 7L4

TSF, in 2027 the 7L5 TSF embarks with 7L6 and 7L7 TSFs begin mining in 2028. The Marievale complex starts

production at 4.7 Mtpa and reaching a steady state mining rate of 9.0Mtpa in 2028 with production

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170

influenced by the various TSFs starting-up or winding down production. The mining of Marievale is

conditional upon the successful resolution of the conflicting ownership claim by the owner of the

freehold on which a part of the complex is situated.

Mining of the Daggafontein TSF commences in October 2031. The top cut is mined from 2031 until 2033,

the middle cut of the TSF being mined for four years, from 2034 until 2037, and the bottom cut mined

from 2038 to 2041 (Figure 13.12, Figure 13.13 and Figure 13.14). Over the 11-year period the

Daggafontein TSF produces 192.8Mt at a grade of 0.24g/t Au.

Figure 13.12: Daggafontein TSF Top Cut Mining Sequence

Source: The RVN Group, 2022

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Figure 13.13: Daggafontein TSF Middle Cut Mining Sequence

Source: The RVN Group, 2022

Figure 13.14: Daggafontein TSF Bottom Cut Mining Sequence

Source: The RVN Group, 2022

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14 Processing and Recovery Methods

14.1 Introduction

The Ergo processing plant located in Brakpan, is Ergo’s flagship metallurgical plant which currently

targets throughput between 1.8Mtpm to 2.0Mtpm. The City Deep processing plant has been

reconfigured to operate as a milling and pump station and feed the Ergo processing plant via a 50km

pipeline. The City Deep processing plant processes mineralized material from TSFs of the Central Rand

areas (i.e., Johannesburg, Germiston, and Boksburg), with mining operations scheduled to close in 2027.

Knights Plant treats sand and slime and will operate until 2024.

The Ergo processing plant follows the conventional method of extracting gold. The plant has been in

operation for more than 30 years, with minor improvements conducted on a regular basis.

Ergo retreats historical tailings and the remaining gold in the TSFs is finely disseminated within the

material. The gold does not respond to physical recovery methods. Direct cyanidation has been used

for decades to solubilize the gold and then recover it by hydrometallurgical techniques. The Carbon in

leach (CIL) process is used with elution and final recovery by zinc precipitation which produces >85%

bullion quality.

14.2 Plant Feed Grade and Metallurgical Test Work

The Ergo processing plant is fed from at least eight different mining sites (including sand and slime) that

are being mined and fed into the plant at any one time. Daily composites are submitted to the assay

laboratory for grade determination to assist with the management of the operations. A sub-sample is

split and composite samples over a week for metallurgical test work. A bottle roll test is conducted

utilizing the same parameters that are used on the full-scale plant. Should any deviations be reported,

further investigations are undertaken.

Prior to commencing reclamation of any mineralized material, a comprehensive drilling exercise is

carried out. As part of the evaluation, sub-samples are sent to Ergo’s in-house metallurgical research

laboratory for testing to assess the amenability of the material to cyanidation and what recoveries can

be expected. Mineralogy work is not carried out on a routine basis but on a needs-basis associated with

the exploration program.

Sand material that is coarse in nature, is first milled prior to cyanidation, while slimes material is processed

without pre-milling. All feed streams are combined before removing extraneous oversize, which could

contaminate the activated carbon, over linear screens. The material is leached with cyanide at an

elevated pH in mechanically agitated tanks. Carbon is then used to adsorb the dissolved gold. The

loaded carbon is removed from the circuit and the gold eluted off the carbon. The gold is then finally

recovered using zinc precipitation and smelting of bullion bars.

The tailings are pumped to a large Mega TSF (Brakpan/Withok TSF) located south of the Ergo processing

plant. The Brakpan/Withok TSF as of June 2022 has a remaining capacity of approximately (~950Mt)

after implementation of the facility’s final life design. The Ergo plant capacity is 64,000tpd and gold

recovery is between 35% and 50%.

A 100% mine call factor is applied at the Ergo processing plant.

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173

For planning purposes, Ergo uses the RoM head grade (i.e., the grade of the RoM material as delivered

to the processing plant) and the anticipated residue grade to estimate the recovery which is the head

grade minus residue grade multiplied by the tonnage treated.

During the life of each TSF, the mined grade is monitored and compared to the estimated Mineral

Reserve grade. Generally, these grades tend to track each other. When the TSF is completely mined, a

final reconciliation is conducted.

Metallurgical test work is carried out routinely using laboratory equipment and leach conditions, which

closely mimic the full-scale operation. The test work is considered representative as historical results are

consistent, and generally minor deviations are seen on numerous tests from the same source material.

The material differs slightly in terms of head grade, particle size and origin, so different recovery factors

are used for each source. Due to the consistency of the exploration and metallurgical test work, no bulk

sampling or pilot scaling test work is conducted.

No specific assumptions or allowances are made for deleterious elements in the material. They are either

screened out before entering the processing plant or if they cannot be removed, the metallurgical test

work results will include the impact. If the impact is too great, the material will not be treated.

Cyanidation of gold bearing material, with elution of gold from the loaded carbon is a tried and tested

process and there is nothing novel about the process.

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Figure 14.1: Process Flow Diagram

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175

Technical Report Summary of the material Tailings Storage Facilities

176

Technical Report Summary of the material Tailings Storage Facilities

177

Table 14.1 indicates the process recoveries for the various plants for the past two years, and the planned

average recoveries over the 19-year LoM. The recoveries are based on metallurgical test work for the

various tailings dumps, slimes and silted vleis that are scheduled to be mined over the 19-year LoM plan.

Table 14.1: Ergo Process Recoveries

Description

2020 to 2021

2021 LoM Average

2022 LoM Average

Total Mine

45.9%

48.9%

40.8%

Source: DRDGOLD, 2022

Note: The drop in the 2022 recovery is due to the inclusion of the Daggafontein TSF which has a recovery of 35%.

14.3 Mineral Process and Equipment Characteristics

The metallurgical process and equipment used at the Ergo processing plant is well tested and utilised

by numerous tailings retreatment operators in South Africa.

14.3.1 Reception

Material received from the various mining sites is first sampled through two in one slurry samplers and

then thickened in four large thickeners to produce an underflow with an SG of 1.45 for leaching and for

recovery of excess water.

14.3.2 De-sanding Section

Thickened material from the four large thickeners is pumped to a distribution box in the de-sanding

section. Here the tailings can be directed to four linear screens which have an 850µm aperture cloth for

the removal of debris to prevent contamination of the carbon. The undersize from the linear screens is

pumped up to a two-way distribution box ahead of the leach.

14.3.3 Carbon-in-Leach

The CIL section comprises of two streams of 11 tanks per stream. Each tank has a capacity of 2,000m

3

and at a throughput of 1.8Mtpm gives a leach residence time of about 11.5 hours, with the first tank

being used for pre-conditioning with lime and oxygen.

Cyanide is added to the second and fourth tank in the leach train. Carbon is present in all but the first

two tanks and is retained by interstage screens. Carbon is moved counter-current up the leach using

recessed impeller pumps. The carbon concentration in the tanks is about 10g/l. Loaded carbon is

transferred to the four loaded carbon hoppers over vibrating screens. Loaded carbon values vary

between 200g/t and 300g/t.

CIL tailings flow through residue samplers before passing over four safety linear screens. Screened

material reports to a residue sump from where it is pumped to the Brakpan/Withok TSF through three

tailings pipelines using five of six installed D-frame pumps.

14.3.4 Carbon Treatment

Loaded carbon is acid treated in 8.5t batches in three independent acid wash columns. The carbon

then reports to three of the four elution columns. The fourth column is used to scavenge gold from the

zinc precipitation tails.

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178

Loaded carbon is first washed with dilute hydrochloric acid to remove acid soluble contaminants. Acid

washed carbon is transferred to the elution column which is operated at elevated temperatures and

pressure to strip gold off the carbon using a cyanide/caustic solution (eluant).

The eluate, which now contains the gold in solution, is contacted with ultra-fine zinc powder to

precipitate the gold. This gold bearing sludge is then filtered in a plate and frame filter. Sludge is then

calcined at 600

˚

C before being smelted in an arc furnace and cast into dorè bars.

Eluted carbon is regenerated in two rotating kilns at about 750

˚

C. In total, about 100 elutions are

conducted monthly.

14.3.5 Plant Services

Instrument Air:

Instrument air is supplied to the float from one compressor house and the remainder of

the processing plant from a centrally located facility.

Process Water:

 Process water is made up of thickener overflow and return dam water and is distributed

throughout the processing plant by a network of pumps and pipes.

Fresh Water:

 The Rand Water Board water is received at a reservoir for use in the processing plant and

directly for elution water, fire hydrants and human consumption.

Power:

Bulk power is supplied to the Ergo processing plant by the Ekurhuleni Metropolitan Municipality.

Natural Gas:

Natural gas is obtained by a pipeline from Sasol and used for elution heating purposes.

Assay Laboratory:

All assays are done by the MAED laboratory which is located on the Ergo processing

plant site but is operated by an independent third party.

14.4 Personnel Requirements

Ergo employs 776 full time employees and 1,628 special service providers, with service providers

deployed mostly in security, reclamation (mining) and tailings deposition. The processing plants employ

376 persons.

14.5 Energy and Water Requirements

Energy and water requirements are discussed in Item 15.3 and 15.5.

14.6 Process Materials Requirements

Ergo has access to all required process material required through their local or international suppliers.

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179

15 Infrastructure

Ergo currently mines the existing gold TSFs and sand dumps in the Johannesburg and Brakpan areas

with slurry pumped via pipelines from the numerous mining operations to the Ergo processing plant

located in Brakpan.

The infrastructure required to support the LoM plan is essentially in place, with future infrastructure

requirements being designed and estimated by Ergo to a PFS level of accuracy (i.e., +/-25%) with a

maximum level of contingency of 15%. Infrastructure requirements and capital costs are based on

current mining operations, as the mining methodology applied to exploit the TSFs and sand dumps are

substantially the same throughout the LoM plan with no significant operational changes expected

between current and planned future operations.

The use of railways, port facilities, dams, leach pads and other infrastructure components not discussed

below as they are not material infrastructure components the Ergo operations.

15.1 Roads

Access to the mining sites is via current municipal and regional road networks with no construction or

upgrading of unpaved roads.

15.2 Site Offices and Workshops

The mining contractors establish site offices as part of the mining contract. Workshops for the

maintenance of roads, pumps and pipelines are based at the Ergo processing plant, and no additional

infrastructure is required.

15.3 Power

Bulk power is supplied to Ergo by Eskom, City Power and the Ekurhuleni Municipality. The power grid

infrastructure serving the East Rand is particularly extensive, with electrical power being received

through several alternative substations on the Eskom grid. Mining sites are supplied via several separate

feeders.

The Eskom power grid has been negatively affected by poor power availability and subsequently, it has

at times been unable to meet power demand. Some load shedding has taken place during 2021 and

2022, affecting the country and Ergo. Electrical demand is approximately between 60MW and 70MW.

Power supply is viewed as a risk to Ergo operations. A risk-mitigating measure that has been

implemented by Ergo is the provision of back -up power and other engineering upgrades to prevent

plant choke-up/silt-down during power interruptions. These measures have enabled the processing

plant to resume full production without extensive delay after each power interruption. A 7MVA diesel

emergency power plant is also available as backup .

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180

Ergo has a curtailment agreement with Eskom whereby the total consumption is reduced on request by

an agreed percentage during load-shedding hours. This involves reducing the total consumption by

between 4MVA and 8MVA during load-shedding hours. The reduction in the power consumption results

in the operations maintaining an uninterrupted tonnage throughput, but recoveries are lower due to

certain parts of the process plant not operating during the load reduction periods.

15.4 Pumps and Pipelines

Slurry transport is mainly via pipelines that carry it to the Ergo processing plant (Figure 15.1). Ergo uses a

standard set of pipes and pumps (500mm pipes). Equipment selection is based on the most suitable

sizes from the standard equipment range.

Figure 15.1: Above Ground Pipeline System

Source: DRDGOLD, 2022

The pipelines are mainly installed above ground, providing easy maintenance access and making it

easier to identify and rectify any failures on these pipelines. Where necessary, pipe bridges are used

along the pipeline routes to cross streams and rivers.

The existing pumping and slurry pipeline systems are managed through a supervisory control and data

acquisition (SCADA) system. The SCADA system allows Ergo to operate the equipment remotely.

Thereby, Ergo can monitor the entire pipeline system via a centralized system. For example, pumps and

valves can be used (open/closed or on/off), and readings taken (pressures and flows) from the

centralized site, with no actual human-machine interface on the actual site. As the pumps are installed

with a duty and standby configuration, the operation of the existing and planned pumping and pipeline

systems should be adequate to support the requirements of the LoM plan.

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Operations west of the Ergo processing plant are serviced by pipeline and other existing infrastructure.

The Marievale and Daggafontein mining areas east of the processing plant have pipeline

permits/servitudes/surface rights in place. The QP has not identified any impediments that would

prevent the construction of the necessary infrastructur e to support the LoM plan.

15.5 Water

The primary uses for water are in the Ergo processing plant and for hydraulic mining of the various TSFs.

Water used for hydraulic mining turns the dry tailings into a slurry, which is then pumped to the processing

plant for processing. Excess water recovered at the thickeners in the processing plant is then returned

to the hydraulic mining sites for re-use.

In 2017, Ergo completed the construction of a central water reticulation plant to give it the ability to

deliver water to all corners of the operation and return it through a fully integrated closed system.

Currently 60% to 70% of all process water make up at Ergo is drawn from the Brakpan/Withok TSF to

various reclamation sites by way of return water columns. A further 6% to 11% of process water

top-up needs are from treated underground acid mine drainage (AMD), drawn from a facility operated

by the Trans-Caledon Tunnel Authority (TCTA) from whom DRDGOLD secured the right to use up to 30Ml

of AMD water per day. The Ekurhuleni City Council’s wastewater treatment facility at Rondebult supplies

less than 1%, depending on the rate at which water flows into the waste facility and another 15% to 20%

is from lakes and dams in the region that captures the inflow of seasonal rain and storm water inflows,

harvested in terms of the requisite extraction licenses. Potable water is used only where the sensitivity of

equipment requires it and for certain early stages of irrigation to settle in newly established vegetation

on TSFs.

Given the location of the Ergo operations, the QP does not foresee the likelihood of the operations

being curtailed due to a water shortage. However, the future increased reliance on water purchased

from Rand Water will add materially to the operating costs.

15.6 Infrastructure

General arrangement drawings are provided for the Rooikraal TSF to demonstrate design work typical

of a mining site (Figure 15.2). The actual construction work will vary slightly to account for specific site

conditions, but generally, the infrastructure is common from site to site, with 52 TSFs planned to be

mined over the 19-year LoM plan.

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Figure 15.2: Rooikraal General Arrangement - Site Layout

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183

Technical Report Summary of the material Tailings Storage Facilities

184

Source: DRDGOLD, 2022

Technical Report Summary of the material Tailings Storage Facilities

185

15.7 Tailings Disposal

The Brakpan/Withok TSF (Figure 15.3) is a single large tailings dam that covers 700ha at its base and

500ha at its current elevation and has a perimeter of around 12km. The Brakpan/Withok TSF was built by

cycloning the tailings at the point of deposition out with the larger particles from the tailings, forming

the dam wall. The annual rate of rise is between 3m and 4m. The fines from the cyclones run out into the

center of the dam. This generates a more stable wall with the finer material safely stored inside the TSF.

With the deposition rate from 1.8Mtpm to 2.0Mtpm the use of cycloning is viewed as the most

appropriate method for disposal of the tailings material. Track mounted cyclone units (Figure 15.4) are

used with eight cyclone units connected to the tailings pipeline system. The TSF was originally designed

by Knight Piésold. Operational activities are currently under contract by Fraser Alexander.

Immediately adjacent and to the south of the Brakpan/Withok TSF footprint lies the former cleared

footprint of an area licensed for tailings storage, spanning an approximate 400 hectares. This area, on

which a large portion of the Withok compartment stood, was retreated and cleared by the former

owners of Ergo. Ergo intends to redeposit residue tailings onto this compartment and has initiated a

process to obtain regulatory approval for the final design of the Brakpan/Withok TSF. The

Brakpan/Withok TSF final design is the engineering design that ultimately brings the tailings deposition

facility to its finality in terms of extent, operation, rehabilitation and management. The implemented

final design would result in alignments with the Global Industry Standard on Tailings Management

(GISTM) and regulatory bodies, increase deposition capacity, improve operation/management and

bring about the sustainable closure of the facility.

The Brakpan/Withok TSF will provide sufficient storage

capacity to support Ergo’s 19-year LoM plan. Ultimately, when the Withok compartment of the TSF

reaches a suitable height, it will merge with the Brakpan compartment of the TSF.

The Brakpan/Withok TSF as of 30 June 2022 has a capacity of 250.4Mt. Once regulatory approvals are

received for its final life design, the TSF will have will have a joint capacity of over 930Mt. 

Technical Report Summary of the material Tailings Storage Facilities

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Figure 15.3: Brakpan/Withok TSF

Source: DRDGOLD, 2022

Figure 15.4: Placement of Tailings Material at Brakpan/Withok TSF

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187

Source: DRDGOLD, 2022

15.8 Conclusion

The QP is of the opinion that all significant infrastructure and logistical requirements have been

considered. It is notable that Ergo has been operating for more than 20 years and has a very good

understanding of infrastructural and logistical requirements.

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16 Market Studies

16.1 Markets

All gold produced is delivered to the Rand Refinery for refining with no restrictions on the quantity or

time frame. DRDGOLD has a long-standing agreement with Rand Refinery in terms of which Rand

Refinery accounts to Ergo at the prevailing spot price. When applying the 30 June 2022 spot exchange

rate (ZAR16.29/USD) to the associated gold price of USD1,819.06/oz Au, a real gold price of

ZAR952,721.20/kg is achieved.

Gold is a precious metal, refined and sold as bullion on the international market. Aside from the gold

holdings of central banks, current uses of gold include jewelry, private investment, dentistry, medicine

and technology (Table 16.2).

Table 16.1: Above Ground Gold Stocks in 2021

Description

Quantity

(t)

Contribution

(%)

Jewelry

94,464.0

46%

Private Investment

45,456.0

22%

Bank Holdings

34,592.3

17%

Other

30,726.0

15%

Source: GoldHub, 2022

The largest use of gold is in jewelry, accounting for approximately 46% of the above-ground gold. Gold

does not follow the usual supply and demand logic because it is virtually indestructible and can easily

be recycled. In addition, gold stored in the vaults of banks is relatively illiquid and subject to the vagaries

of global economies. These characteristics of the gold market make it challenging to forecast the gold

price.

16.2 Gold Price

The gold price increased in 2020 due to uncertainties related to the outbreak of Covid-19. It then 

declined to a spot price of ~ZAR945,295/kg (i.e., USD1,806.89/oz at ZAR16.27/USD) as at

30 June 2022 (Graph 1).

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189

 800

 1,000

 1,200

 1,400

 1,600

 1,800

 2,000

 2,200

 2,400

Jun-17

Jun-18

Jun-19

Jun-20

Jun-21

Jun-22

Gold Price (USD/oz)

Gold's Monthly Closing Price

Trendline

Upper and Lower Standard Deviation Bands

 10

 11

 12

 13

 14

 15

 16

 17

 18

 19

Jun-17

Jun-18

Jun-19

Jun-20

Jun-21

Jun-22

Exchange Rate (ZAR/USD)

Monthly Closing USD/ZAR Rate

Trendline

Upper and Lower Standard Deviation Bands

Graph 1: Gold Price Historical Trendline

Source: Sound Mining, 2022

The linear trendline indicates robust gold price potential over the longer-term.

16.3 Exchange Rate Trends

The ZAR to USD exchange rate saw record breaking highs in the second quarter of 2020 (ZAR19.35/USD)

but has subsequently dropped back to ZAR16.27/USD as at 30 June 2022. A factor in the deterioration

of the local currency in 2020 was the lockdowns and economic volatility brought on by Covid-19.

The spot exchange rate of ZAR16.27/USD compares well with the six-year historical trendline as displayed

in Graph 2.

Graph 2: Exchange Rate Historical Trendline

Source: Sound Mining, 2022

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0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Quantity (t) 

Year

Various service providers and financial institutions are consulted to determine consensus forecasts of the

gold price (Table 16.2).

Table 16.2: Long Term Consensus Forecasts in Nominal Terms

Description

Year 1

(FY2023)

Year 2

(FY2024)

Year 3

(FY2025)

Year 4

(FY2026)

Year 5

(LT)

USD/oz

1,823

1,799

1,751

1,724

1,496

ZAR/USD

15.60

15.74

15.77

15.79

15.20

ZAR Price/kg

914,294

910,051

888,083

875,474

731,081

Source: Sound Mining, 2022

The economic assessment for the Mineral Reserve estimate relies on a real price of ZAR914,294/kg (i.e.,

USD1,823/oz at ZAR15.60/USD) as of 30 June 2022 terms as provided by DRDGOLD. The QP has

considered the consensus forecasts supplied by DRDGOLD against linear trends in the demand and

supply of gold as recorded over the period from 2012 to 2021 to examine whether these forecasts are

reasonable.

16.4 Global Demand

Graph 3 reveals a gradual reduction in demand (~14.2%) over the past ten years (2012 to 2021).

Graph 3: Global Gold Demand from 2012 to 2021

Source: GoldHub, 2022

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4,100

4,200

4,300

4,400

4,500

4,600

4,700

4,800

4,900

5,000

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Quantity (t) 

Year

16.5 Global Supply

The global gold supply from mining and recycling activities over the same period is presented in Graph

4.

Graph 4: Global Gold Supply from 2012 to 2021

Source: GoldHub, 2022

While the graph suggests an overall upward trend from 2012 to 2021 (~2.6%), the supply generally

levelled out over the past five years. The supply from mining satisfied some 76% of the demand in 2021,

with the balance met by recycled gold.

Gold supply from mining increased by approximately 106t during 2021 (3,582t) when compared with

2020 (3,476t) despite an overall drop in supply since 2019 (GoldHub, 2022). Below are the top ten gold

producing countries in 2021 (Table 16.3).

Table 16.3: Global Gold Production

Rank

Country

Production

(t)

2016

2017

2018

2019

2020

2021

1

China

464

429

404

383

368

332

2

Russia

262

281

295

330

331

331

3

Australia

288

293

313

325

328

315

4

Canada

163

171

189

183

171

193

5

United States of America

229

236

225

200

190

187

6

Ghana

131

133

149

142

139

129

7

Peru

166

167

163

143

98

127

8

Mexico

131

120

118

109

102

125

9

Indonesia

118

118

153

92

101

118

10

South Africa

163

154

128

111

99

114

Source: GoldHub, 2022

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16.6 Concluding Comments

The QP notes a short-term up-tick despite the long-term reduction in demand together with an

essentially constant supply over the past five years. These trends are not inconsistent with the forecast

price trend in Table 16.3. The QP is satisfied that a real 30 June 2022 gold price of ZAR914,294/kg is a

reasonable assumption for examining the economic viability of the Mineral Reserve estimate.

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17 Environmental Studies

17.1 Results of Environmental Studies

An Environmental Impact Assessment (EIA) has been conducted over the Ergo operation with the

findings of the EIA showing that the operation would result in certain negative impacts during the

operational phase to the environment, however, none of the specialist studies objected to the project.

During the mining operations, negative impacts are largely Moderate to Insignificant, and after

interventions the impacts are mitigated to a Low significance. During the decommissioning and post-

decommissioning phases, most of the impacts will be positive as the historical TSFs and associated

environmental impacts of the TSFs are removed.

Social and community interaction remains a key focus for Ergo. Stakeholder engagement is reported

annually with the SLP compliant and filed with the proper authorities. Ergo appears to have good

relations with surrounding communities and engages proactively.

The QP is unaware of any material flaws in terms Ergo’s social license to operate, however, it is noted

that in the current South African socio-political issues remain a risk and require constant monitoring.

Rehabilitation will be carried out once the reclamation of individual TSF are completed, with

rehabilitation returning the disturbed land to as close to its original landscape as possible.

The principles for proper rehabilitation are:

●

preparing a comprehensive rehabilitation plan prior to the commencement of any activities on

site;

●

stormwater management must be in place at the site prior to commencing with any activities;

●

landform design (e.g., shaping, re-grassing, etc.);

●

maintenance management and eradication of invader species;

●

a plan on how waste will be managed on site; and

●

an emergency preparedness/response plan.

The objective of the site rehabilitation (in accordance with the NEMA EIA Regulations of 2014) must be

measurable, practical and be feasible to implement through:

●

providing the vision, objectives, targets and criteria for final rehabilitation of the project;

●

outlining the principles for rehabilitation;

●

explaining the risk assessment approach and outcomes and link decommissioning activities to

risk;

●

rehabilitation detailing the decommissioning and rehabilitation actions that clearly indicate the

measures that will be taken to mitigate and/ or manage identified risks and describing the nature

of residual risks that will need to be monitored and managed post decommissioning;

●

identifying knowledge gaps and how these will be addressed and filled; and

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●

outlining monitoring, auditing and reporting requirements.

17.2 Requirements for Tailings Disposal, Site Monitoring and Water Management

The general description of the Brakpan/Withok TSF is covered in Item 15.

17.2.1 Site Monitoring

Site monitoring provides information on whether rehabilitation methods employed are functioning

correctly or not. The purpose of monitoring is to ensure that the objectives of the rehabilitation program

are met, and that the progressive rehabilitation process is followed as planned during the LoM.

The post closure monitoring period will begin once scheduled decommissioning and rehabilitation

activities for the sites have been completed. The duration of post closure monitoring will be determined

based on environmental performance and until it can be demonstrated that the rehabilitation work has

achieved the agreed outcomes; however, at present, it has been assumed that post closure monitoring

will not continue for more than five years. It is important that the data obtained during monitoring is used

to gauge the success of rehabilitation. Negative monitoring findings should be clearly linked to specific

corrective actions.

The following aspects should be monitored during the post-closure phase.

17.2.2 Water Management

The quality of groundwater and surface water at the various sites will be monitored quarterly for five

years post closure, except for the Knights Mining Right which requires 30 years monitoring at certain

monitoring points as per the approved WULs, to ensure compliance of the various constituents with the

standards. Samples should be analyzed for particulate and soluble contaminants. Water monitoring will

be taking place at 76 different locations.

17.2.3 Vegetation Monitoring

The following vegetation monitoring is recommended:

●

vegetation cover;

●

species composition;

●

erosion; and

●

alien invasive plants.

17.2.4 Vegetation Maintenance

Vegetation maintenance will specifically focus on fertilizing the rehabilitated areas annually if required,

controlling alien invasive plants where needed and general maintenance such as in-filling of erosion

gullies. In the case of erosion, the cause should be identified, and rectified.

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17.2.5 Water Monitoring

Currently, 66% of all process water make-up at Ergo is drawn from water returned from the Brakpan as

shown in Table 17.1.

Table 17.1: Ergo Water Consumption

Description

Total Consumption 2022

Total Consumption 2021

Ml

%

Ml

%

Potable Water Sources Externally

2,460

9

2,813

11

Rondebult Waste Water

27

-

46

-

Surface Water Extracted

4691

18

4,210

17

Water Recycled in Process

16,302

62

17,233

66

TCTA Water (AMD)

2,907

11

1,683

6

Total Water Used

26,387

100

25,985

100

Source: DRDGOLD, 2022

17.2.6 Legal and Permitting

Item 3 of the TRS (Table 3.2) discusses the Mining Rights and Prospecting Rights details for Ergo’s and the

status thereof.

Ergo’s EMP encompasses all the activities of Ergo’s operations and assesses the environmental impacts

of mining at reclamation sites, plants and TSFs. It also outlines the closure process, including financial

provisions.

There are currently no legal challenges to Ergo’s title to its reserves other than those discussed below.

The QPs are aware of two issues that could impact on Ergo’s current mining rights or mining operations.

Grootvlei Complex:

Ergo has a Mining Right over Grootvlei TSF 6L14 via Mining Right GP158MR and has

submitted a renewal application of its Prospecting Rights over Grootvlei TSFs 6L16, 6L17 and 6L17A to the

DMRE, which application is pending. During the 2022 financial year, an external party raised a

conflicting claim of common law ownership of TSFs 6L16, 6L17 and 6L17A. Although the claim was on

common law ownership and no challenge has been brough against the Prospecting Rights over the

dumps, the Grootvlei Complex has been excluded from the Mineral Reserves statement and the LoM

plan. However, the Grootvlei Complex has been included in the Mineral Resources statement as Ergo is

of the opinion that the Prospecting Rights will be renewed.

Marievale Complex:

 Ergo acquired the Marievale TSFs 7L5, 7L6 and 7L7 in terms of a written notarially

executed deed of sale during 2019 and took possession of the TSFs on 8 April 2019. It has since also

obtained the requisite NEMA regulatory approvals to retreat these TSFs. During the 2022 financial year,

the owner of the land on which 7L5, 7L6 and a portion of 7L7 are situated, an estimated 36,524t out of

the total 54,114t comprising the Marievale Complex, notified Ergo that in its view, the said TSFs had

acceded to the land, and that it had become the owner of the TSF. Ergo disputes the claim of legal title

and the matter is to be referred to arbitration. All ownership requirements were met when the TSFs were

purchased by Ergo and therefore these TSFs are still included in the LoM plan and Mineral Reserves.

Whilst Ergo has received confident legal advice of the merits of its claim, in the event that the arbitration

goes against Ergo, its Mineral Reserves will reduce by 35.52Mt (0.35Moz at 0.29g/t). In so much as it then

enters into a commercial arrangement with the landowner, the financial benefit of this portion of the

Marievale Complex will be reduced by whatever benefit is agreed to in favor of the land-owner.

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196

Ergo has submitted a renewal application to the DMRE for the Prospecting Rights it holds over the 7L4

TSF as described more fully under Item 3.6.

17.3 Plan Negotiations, or Agreements with Local Individuals or Groups

Social and community interaction remains a key focus for Ergo. Stakeholder engagement is reported

annually against the SLP and any complaint is filed with the proper authorities.

The QP is unaware of any material flaws of Ergo’s social license to operate. However, it is noted that in

the current South African political environment, social and community issues always remain a risk and

require constant monitoring.

The five-year SLP was submitted by Ergo in terms of the requirements of the MPRDA. The development,

submission and implementation of an SLP is a requirement of the MPRDA and the right to mine. Table

17.2 indicates the budget for the 2018 to 2022 SLP, noting that the SLP plan is conducted in five-year

segments.

The SLP covers three key elements:

●

Human Resource Development (HRD)

: which focuses on the empowerment of historically

disadvantaged South Africans to progress to higher career levels within the industry. Ergo has

various programs to address this aspect, including skills development programs, career

progression and mentorship employment equity targets ;

●

Local Economic Development (LED):

 which focuses on the upliftment of both the surrounding

(affected) and labor-providing communities. Ergo has four projects, one agricultural

development, a sewing project and two projects to upgrade facilities at primary schools. A

ZAR10 million budget is allocated to these LED projects ; and

●

Program for Management of Downscaling and Retrenchment:

 which focuses on minimizing

negative impact due to either job losses through retrenchment and mine closure in the long-

term.

Table 17.2: SLP Financial Provision Summary

Description

2018

2019

2020

2021

2022

Total

(ZAR million)

HRD Total

7.08

7.53

5.69

5.91

7.08

33.29

LED Total

3.40

5.80

2.60

2.20

1.50

15.50

Downscaling Retrenchment

13.00*

SLP Budget

10.48

13.33

8.29

8.11

8.58

61.79

Source: DRDGOLD, 2022

Note: *This amount has already been accrued and is available for reskilling should the mine prematurely be forced to close.

17.4 Mine Closure Plans Remediation Plans, and Associated Costs

In accordance with South African mining legislation, all mining companies are required to rehabilitate

the land on which they work to a determined standard for alternative use. Ergo has spent ZAR198 million

on various rehabilitation activities in the three years between 2020 and 2022.

A community consortium, consisting of nine local companies that represent areas including Langlaagte,

Diepkloof, Meadowlands, Orlando West, Orlando East, Riverlea, Pennyville and Ormonde, has been

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established to conduct certain rehabilitation work for Ergo as part of its small enterprise development

initiatives. It currently employs 27 community members from the abovementioned areas. Their current

project entails the establishment of new side slope vegetation on the Crown TSFs and to irrigate until the

vegetation is self-sustainable.

Ergo is on track to complete this vegetation program by 2026.

In 2016, a decision was taken to complete the recovery of mine waste materials from a number of

legacy reclamation sites and to close the Crown plant. The clean-up of the legacy sites has proven

difficult and costly and requires the use of earthmoving equipment to mechanically lift and move

residual material. Steady progress is being made on the clean-up and closure of these legacy sites.

As clean-up work on former reclamation sites is completed, applications are submitted to the National

Nuclear Regulator (NNR) for land clearance certificates. In 2019, Ergo received land clearance

certificates for an area covering approximately 135.5ha from NNR, releasing land located close to the

Benoni central business district for development.

In 2019, applications were lodged with the NNR in respect of 136ha of rehabilitated land for clearance.

In 2020, applications were lodged for a further 27ha of rehabilitated land , in 2021, for a further 87.6ha

and in 2022, for a further 23.6ha.

Ergo’s decommissioning and restoration liabilities are funded by a combination of funds that have been

set aside for environmental rehabilitation. ZAR132.7 million is currently held in the Guardrisk Cell Captive

under a ring-fenced environmental insurance policy. Further environmental guarantees of ZAR377.8

million have been issued by Guardrisk Insurance Company Limited to the DMRE. In total, Ergo has

ZAR510.5 million in environmental rehabilitation and closure cover.

The calculated costs for rehabilitation and closure of the Ergo Operations estimated by Digby Wells are

ZAR639 million (Table 17.3). Ergo systematically audits and monitors progress on rehabilitation and

closure and adjusts its provision accordingly. Required audits are undertaken and submitted to the

DMRE annually.

Table 17.3: Ergo Rehabilitation Financial Provision Summary

Area and Mining Right

Closure Cost 2022

(ZAR)

CMR - GP186MR

11,845,711

Crown - GP184MR

125,160,690

City Deep - GP185MR

41,802,525

Knights - GP187MR

46,318,600

ERPM - GP150 and 151MR

10,240,493

Ergo - GP158MR

403,565,361

Total (excluding VAT)

638,933,381

Source: Digby Wells, 2022

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17.5 QP Statement on the Environmental Studies, Permitting, Plans, Negotiations, with Local

Individuals or Groups

The QP is satisfied that all material issues relating to Environmental, Social and Governance have been

addressed in this document.

The above statement is borne out by the fact that Ergo incurred no fines of monetary value or significant

non-monetary sanctions for non-compliance with environmental laws and regulations were imposed in

the past four years (2019, 2020, 2021 and 2022).

The QP finds the funding mechanism appropriate for mine rehabilitation and mine closure, but notes

that there is a shortfall between the reclamation funding and the July 2022 Digby Wells closure cost

estimate.

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18 Capital and Operation Costs

The capital expenditure and operating costs provided take cognizance of the requirements to support

the LoM plan. The capital expenditure takes into account the ongoing requirements of starting new

operating sites as current TSFs Mineral Reserves are depleted. This capital expenditure schedule is based

on the LoM production schedule with the capital expenditure based on mining and engineering designs

conducted to a PFS level of accuracy (i.e., +/-25%) with a maximum level of contingency of 15% being

applied.

The operating costs support the planned LoM production profile taking into consideration whether slimes

or sand material is mined and the method and distance in which the mineralized material is

transported(i.e., pumped or trucked). Operating costs are activity-based costs accounting for surface

mining costs (extraction and transportation); processing costs (including tailings disposal costs), cost of

maintaining key mine infrastructure and general and administrative costs. The estimate of operating

costs are based on historical operating cost data, which is well understood as Ergo is a well-established

mining operation. Operating costs are estimated to at least a PFS level of accuracy (i.e., +/-25%) with

no contingency applied due to the understanding of the cost to mine and process the RoM material .

18.1 Capital Expenditure

A total capital of ZAR3.22 billion is scheduled to support the Ergo LoM plan. The breakdown of capital

expenditure indicates the majority of the capital, ZAR3.14 billion, is allocated to the Ergo Section over

the duration of the LoM plan with an additional ZAR81.9 million allocated in 2022 for the City Section. As

the mining at the Knights Section is completed in 2024 there is no allocation of capital.

The capital expenditure summary as proposed in the 30 June 2022 LoM plan is presented in

Table 18.1. The level of accuracy for the capital expenditure is to at least a PFS level of accuracy

(i.e., +/-25%) with a maximum level of contingency of 15%.

Table 18.1: Capital Expenditure Summary

Area

Budgeted Capital

Expenditure

(ZAR)

Ergo Section

3,137,603,000

City Section

81,923,000

Knights Section

0

Total (excluding VAT)

3,219,526,000

Source: DRDGOLD, 2022

18.1.1 Ergo Section Capital Expenditure

This section depicts the capital expenditure estimate for the Ergo Section. Table 18.2 indicates the

Rooikraal capital expenditure estimate planned in January 2022. 

Table 18.2: Rooikraal Capital Expenditure Estimate

Discipline

Capital Expenditure

(ZAR)

Consultancies

324,000

Civil

15,100,835

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Structural Steel

14,591,639

Mechanical

18,783,480

Piping

99,680,396

Electrical

28,471,978

Instrumentation

1,599,218

Security

415,634

Other

2,824,000

Total

181,791,181

Source: DRDGOLD, 2022

Note: ZAR 91.759 million spent in 2021/22 financial year

Table 18.3 indicate the capital expenditure estimate for the Marievale pump station and total Marievale

capital expenditure estimate respectively.

Table 18.3: Marievale Capital Pump Stations

Area

Budgeted Capital

Expenditure

(ZAR)

Consultants

294,000

Civil engineering

29,793,240

Structural steelwork

30,583,013

Mechanical

36,020,706

Electrical

66,507,688

Instrumentation

4,471,908

Security

1,525,297

Other

7,568,000

Total (excluding VAT)

176,763,853

Source: DRDGOLD, 2022

Table 18.4: Marievale Total Capital Expenditure Summary

Area

Budgeted Capital

Expenditure

(ZAR)

Pump Station

176,763,853

Slurry Pipeline

65,628,130

Water Pipeline

56,328,874

Water Transfer

41,343,778

total (excluding VAT)

345,590,778

Source: DRDGOLD, 2022

Table 18.5 shows the estimated capital expenditure for the Daggafontein pump station, inclusive of a

ZAR4.6 million contingency (4.2%). Table 18.6 indicates the Daggafontein capital expenditure summary.

Table 18.5: Daggafontein Capital Pump Stations

Description

Budgeted Capital

Expenditure

(ZAR)

Consultants

294,000

Civil Engineering

17,611,703

Structural Steelwork

18,279,748

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Mechanical

20,300,199

Electrical

41,446,040

Instrumentation

4,471,908

Security

415,634

Other

7,568,000

Total (excluding VAT)

110,387,234

Source: DRDGOLD, 2022

Table 18.6: Daggafontein Capital Expenditure Summary

Area

Budgeted Capital

Expenditure

(ZAR)

Pump Stations

110,387,234

Slurry Pipeline

36,981,310

Water Pipeline

33,161,400

Daggafontein Plant Upgrades

86,149,055

Total (excluding VAT)

266,679,000

Source: DRDGOLD, 2022

Table 18.7shows the non-material TSF Capital Expenditure for the Ergo Section.

Table 18.7: Non-material TSF Capital Expenditure for the Ergo Section

Area

Budgeted Capital

Expenditure

(ZAR)

4L14

50,157,000

7L15

60,000,000

4L39

69,927,000

5L27

59,852,000

Sustaining

1

 and Small Capital Projects

837,085,000

Total (excluding VAT)

1,077,021,000

Source: DRDGOLD, 2022

Note:

1. Sustaining capital of ZAR30 million between years 3 to 18 (ZAR480 million); ZAR221.4 million and ZAR105.6 million allocated in year 1 and

year 2 to complete numerous small capital programs

The Withok compartment design is based on upstream cyclone system and a scavenger well system for

environmental containment. The Brakpan/Withok TSF has been digitally modelled which model has

been used to inform the various quantities of the various infrastructure aspects. The capital costs to

implement the Withok compartment has been estimated upon typical contractor tender

methodologies by Beric Robinson Tailings (Proprietary) Limited. Table 18.8 indicates the capital

expenditure budget for the proposed Withok compartment . The Withok compartment design work has

been conducted to a PFS level of accuracy with a 15% contingency applied to the capital estimate.

Table 18.8: Withok Compartment Capital Expenditure

Area

Budgeted Capital

Expenditure

(ZAR)

Construction Contract

456,056,963

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Material Supply

76,009,494

Engineering Design and Oversight

3,648,456

Scavenger Boreholes

12,161,519

Pumps, Power Reticulation and Other

60,807,595

Sub-total

608,684,026

Contingency 14%

91,302,604

Total (excluding VAT)

699,986,630

Source: DRDGOLD, 2022

The capital budget for the solar power project is shown in Table 18.9.

Table 18.9: Solar Power Project Capital Estimate

Area

Budgeted Capital

Expenditure

(ZAR)

Solar MW Works

69,579,000

Solar 20MW

338,084,000

Solar 88kV (15% contingency)

239,660,000

Total (excluding VAT)

646,323,000

Source: DRDGOLD, 2022

18.1.2 City Capital Expenditure

A capital of ZAR81.9 million has been allocated to the City section in 2022 (Table 18.10).

Table 18.10: City Total Capital Expenditure Summary

Area

Budgeted Capital

Expenditure

(ZAR)

4/L/4 TSF

19,527,000

Valley Silts

62,396,000

Total (excluding VAT)

81,923,000

Source: DRDGOLD, 2022

18.1.3 Knights Capital Expenditure

Due to the short life of the Knights Section, no capital expenditure has been planned or budgeted.

18.1.4 QP commentary

The QP associates a low risk to the engineering capital expenditure for the mining associated projects

as the design and construction of pump stations and pipelines have been conducted numerous times

by Ergo. The QP notes the level of accuracy for the capital expenditure estimates are to a PFS level

accuracy (i.e., +/-25%). Contingency varies between 0% to 15% with contingency typically applied to

civil work, structural steelwork and electrical and instrumentation. In no case is the contingency above

15%.

The QP is of the opinion that the risk associated with the Withok compartment capital estimate and solar

plant and storage facility is Low to Medium and typical of a PFS level of accuracy (i.e., +/-25%).

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18.2 Operating Costs

Mining related operating costs are assigned to the Ergo processing plant and the mining of the various

TSFs. A different operational cost is applied to each deposit, depending on its composition, proximity to

the processing plant and the reclamation method. Sand dumps have a higher cost than slimes, as sand

must be milled down to 80% less than 75µm while the slime can be treated in the CIL tanks directly.

Mining related operating costs are assigned to the planned TSFs to be mined and the Ergo processing

plant. The planned average operating cost for the Ergo 19-year LoM plan is estimated at a PFS level of

accuracy (i.e., +/-25%) with a maximum level of contingency of 15% with a total working cost of

ZAR90.86/t (Table 18.11).

Table 18.11: Average LoM Operating Cost for Ergo

Operating Cost

Average LoM

Operating Cost

(ZAR 000’s)

Labor

375,733

Consumables

663,822

Electricity

81,735

Water

28,557

Contractors

350,715

Other

262,710

Sub-total Cash Cost

1,863,272

Rehabilitation Cost

25,349

Other Operation Cost

24,572

Retrenchment Cost

6,215

Corporate Cost

42,916

Sub-total Other Cost

99,052

Total Working Cost

1,962,324

Source: The RVN Group, 2022

The development of the annual operating costs is based on historical cost data as Ergo has been

operational for numerous years. The QP associates a Low risk with many of the operating costs, however

a Medium risk is associated with consumables, electricity and water due to the volatile nature of the

market of these items. Ergo is attempting to mitigate the volatility with the installation of the solar power

project and reuse of water where possible. Refer to Item 19.3 for more details on risk.

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19 Economic Analysis

19.1 Economic Analysis

The 30 June 2022 19-year LoM plan, which is the basis of the Mineral Reserve, is scheduled to mine a

total of 410.33Mt at 0.28g/t Au and produce 50,658kg of gold over the same period. The economic

analysis is based on a LoM plan that is designed to a PFS level of accuracy (i.e., +/-25%). The economic

analysis conducted by the QP indicates a net present value (NPV) of ZAR2.2 billion after capital

expenditure and taxation utilizing a discount rate of 9.48% (real terms). As the Ergo operations are an

on-going with an annual positive cashflow, the internal rate of return (IRR) and payback period are not

applicable.

Figure 19.1: Ergo LoM Production Tonnage

Source: The RVN Group, 2022

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Figure 19.2: Ergo LoM Gold Production

Source: The RVN Group, 2022

Table 19.1 presents the Ergo cashflow model over the 19-year LoM Plan. The NPV has been calculated

by discounting the positive cashflows at the appropriate rate and subtracting the required capital

expenditure. The QP has made the assumptions listed below to derive a realistic base case operational

cashflow model:

●

the production schedule is sourced from the Ergo LoM plan. The mining tonnage schedule is

shown in Figure 19.1, which varies between 23.0Mtpa and 18.2Mtpa;

●

plant feed grade as per the LoM schedule (Figure 19.2) with an average grade of 0.28g/t Au;

●

the average metallurgical recovery over the LoM schedule is 40.9%;

●

total working costs estimated at ZAR90.86/t RoM are inclusive of mining, metallurgical and

general and administration costs (working costs);

●

the gold market price is set at ZAR914,294/kg (see Item 16 for further information for gold price

in USD/oz and exchange rate);

●

capital expenditure of ZAR3.219 billion is inclusive of contingency ;

●

no salvage value of assets has been assumed;

●

a tax rate of 27%;

●

a discount rate of 9.48% in real (no inflation) terms;

●

no royalty payment is applicable to Ergo, as the operation is not subject to royalties on the

retreatment of TSFs;

●

capital expenditure was fully written-off against operating profit, with no time constraint; and

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●

no escalation or inflationary effects have been included in the economic evaluation, which is

based on constant money value (real terms).

The NPV of the Ergo LoM plan as at 30 June 2022 was calculated at ZAR2.2 billion at a discount rate of

9.48% as shown in Table 19.1

.

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Table 19.1: Economic Analysis

Source: The RVN Group, 2022

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19.2 Sensitivity Analysis

The sensitivity analysis of the Ergo financial model that varies revenue (price and grade); operating cost

and capital expenditure at 5% increments above and below the base case is shown in Figure 19.3. The

analysis indicates that the Ergo operations are very sensitive to revenue parameters such as gold price,

grade, and recovery. In addition, the LoM plan is also very sensitive to changes in operating costs. The

sensitivity indicates that the LoM plan is not as sensitive to capital and therefore capital expenditure

should be considered if the expenditure will result in reducing operating cost or increase revenue. The

sensitivity indicates that achievement of the LoM plan in terms of tonnage is critical in realizing the

planned operating costs and being able to mine at the planned cut-off grade. The QP is unaware of

any capital expenditures, that if delayed, would materially affect the LoM plan or cashflow. The QP is

of the opinion that no extremely weather conditions will materially impact on the capital development

program.

Figure 19.3: Sensitivity Analysis

Source: The RVN Group, 2022

19.3 Risk Assessment

The following highlights show the key risks that Ergo has identified as critical to their operations,

as well as comments on mitigation of these risks.

19.3.1 Rising Electricity Prices and Eskom Supply Distribution

The mining industry is a dominant consumer of electricity, consuming approximately 30% of the national

electricity supply. The processing plants operate on a “24/7/365” basis and continuous electricity supply

is paramount to achieving a stable plant with enhanced efficiencies.

Eskom remains the biggest systemic risk to the sustainability of the South African economy. On

28 July 2020, a court judgment was given against the National Energy Regulator of South Africa (NERSA)

and allowed for Eskom to increase its tariffs from the original 5.22% on 1 April 2021 to approximately 15%.

An increase of 14.59% was approved for the 202 1 to 2022 municipal tariff after Eskom applied for an

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electricity price increase of 20.5%. In February 2022, NERSA allowed for an increase of 9.6% in the

standard electricity tariff as implemented in April 2022.

Ergo has adopted a two-staged approach to the risks associated with electricity supply.

Firstly, Ergo has had to install extensive back-up systems to counteract the impact of unscheduled

interruptions in the power supply. Although Ergo is unable to maintain full production during black-outs,

back-up generator sets ensure that the processing plants remain in motion and that the circuits do not

choke or become blocked through the settlement of solids in the slurry. This enables the immediate start-

up of production once the power is restored.

At the Brakpan/Withok TSF, the back-up capacity is sufficient to ensure that deposition can continue

uninterrupted, thus there is no interference with the processing plant operations (i.e., if the deposition

system comes to a halt, then the entire operation will stop). From a safety perspective, it is also essential

that the water balance on the TSF pumping operations remain under control to ensure that water on

the Brakpan/Withok TSF remains within the stated factors of safety.

The second important strategic consideration regarding electricity supply is to address the impact of

escalating electricity costs. Ergo continues to investigate ways of reducing the impact of price

increases. Power storage and the pricing policy of Eskom to charge different rates during peak and off-

peak periods appear to be the most likely near-term solutions in this regard. Charging power storage

units during these periods and then drawing them down during peak hours to avoid peak rates, may

well in the long-term, provide a financially feasible model in this regard. 

Ergo has obtained regulatory approvals for the development of a solar photovoltaic and battery

storage facility which will be located adjacent to the Ergo processing plant. Ergo has approved

ZAR646.3 million to develop the first phase of the solar energy project.

19.3.2 Tailings Storage Facility Capacity

Ergo is a volume-driven business. As a result, Ergo needs to ensure that there is sufficient capacity in its

TSFs to deposit material after processing and extracting gold in the plant. Additional tailings storage

capacity is required in the medium-term to continue operating at current levels. This additional capacity

will come from the Brakpan/Withok TSF, adjacent to the Brakpan TSF. Ergo has allocated ZAR700 million

for the implementation of the Brakpan/Withok TSF final life design. These is a risk of production being

reduced in the event that regulatory approvals are not obtained or not obtained timeously. 

19.3.3 Social Unrest

The growing frustration of society due to lack of Government service delivery and high rates of

unemployment (heightened by the impact of the Covid-19 pandemic) lead to increased protests and

conflict, affecting communities in and around Ergo’s operations. This may result in operational

disruptions.

19.3.4 Increased Crime

The current strained economic and uncertain socio-political environment contribute to adverse crime

trends. Ergo operations are not immune to crime and are frequently targeted by criminals as well as

syndicates seeking access to gold or gold concentrate.

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19.3.5 Depletion of Ergo

’

s Mineral Reserves

Ergo’s strategy is to maintain its Mineral Reserve base by improving the robustness of LoM plan by

increasing production through better extraction efficiencies. Another risk associated with Ergo’s Mineral

Reserve is the depletion of higher-grade Mineral Reserves. The current gold price assists with the

economic viability of lower grade TSFs, however when the gold price drops, it will be important to

optimize the LoM plan to enable the mining of lower grade TSFs. This will require optimizing the mining

throughput, reducing operating costs and improving the mineral recovery efficiencies. The QP

associates a low to medium risk to the Mineral Reserve base as some TSF are operating close to the cut-

off grade. In certain instances, the risk may be negated by increasing the mining rate of the TSF, thereby

reducing the per unit operating cost and the cut-off grade.

19.3.6 Social Licenses to Operate

Historically, mining has taken place in the Johannesburg area since 1886 and therefore, environmental

and waste disposal practices that were designed and that may have been adequate in a less densely

populated environment, are inadequate today. Ergo’s entire operating footprint is the legacy footprint

of mining in Johannesburg specifically in the East Rand. An integral part of Ergo’s mining process is to

remedy the shortcomings of that legacy by mining and the historical TSFs.

While mining, there can be high levels of dust and other disturbances from reclamation sites, however,

the result is a better and cleaner environment once the TSF us removed. To minimize the impact of

mining operations, Ergo conducts dust monitoring and implements measures to suppress dust.

In addition, Ergo has adopted the strategy of concurrent rehabilitation, which reduces Ergo’s long-term

environmental obligation. Ergo’s current mine design strategy is to conduct rehabilitation of completed

mining sites as soon as practically possible (See Item 17 for further Environmental, Social and

Governance commentary).

Pressures and demands on business by local communities, non-government organizations have

increased. Social license to operate issues are typically driven by the social and economic landscape;

and the Covid-19 pandemic has exacerbated the social and economic issues in South Africa.

Unemployment, hunger and desperation are of great concern and Ergo has been active in supporting

the local communities. Ergo will, however, be increasingly exposed to this risk should social and

economic conditions in the country not improve.

19.3.7 Fluctuations in the Gold Price and Exchange Rate

As a market price taker, Ergo is exposed to fluctuations in the United States Dollar gold price and

ZAR/USD exchange rate. The higher the gold price, the higher the profitability. A noticeable upswing in

the gold price has occurred since March 2019 (Figure 19.4), with a peak of USD1,970/oz achieved in

July 2020, and a 30 June 2022 price of USD1,829/oz. Between the August 2021 peak and the July 2020

high, a gold price low of USD1,062 was reached in November 2015, indicating price volatility of

approximately USD700/oz between the high and low gold prices from 2011 to 2022.

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Figure 19.4:

30-Year Gold Price in USD/oz (1992 to 2022)

Source: Macrotrends.net, 2022

This is mainly because of investors returning to gold as a safe haven asset in the wake of recent fears of

a global economic slowdown. The ZAR/USD exchange rate remained volatile throughout the year

mainly as a result of economic uncertainty marred by political instability and global market slowdown

sentiment.

Since the revenue line is determined by external factors, Ergo manages this risk by being very focused

on areas that it can influence such as costs and operational efficiency. Ergo continues to look at ways

to impede the increase of costs and save costs by making ongoing continuous improvements on

process and efficiencies. Precise dosing of chemicals and consumables, based on the ongoing analysis

of key drivers in the Ergo processing plant, contributes to keeping costs as low as possible; lower friction

in pipelines through HDPE lining reduces power consumption, and maintaining a closed water circuit

and use of recycled water reduces the costs of water consumption are a few initiatives implemented.

To limit the vulnerability to a drop in the price of gold in ZAR terms, Ergo monitors costs in line with the

approach stated above. In addition to that, Ergo also works hard to increase recoveries.

19.3.8 Supply and Cost of Water

Ergo’s surface retreatment operations are reliant on water to transport the slimes from reclaimed areas

to the processing plant and to the TSF.

It is acknowledged that water is a limited natural resource, crucial for the sustainability of the planet

and South Africa is a water-scarce country. There are increasing calls from interest groups for

intervention to avoid future deficits in water supply. Over the past few years, Ergo has deliberately

focused on investing in infrastructure and strategies to reduce the reliance on potable water and

expand the use of other water sources. Ergo relies on third party providers for any shortfall in water.

Technical Report Summary of the material Tailings Storage Facilities

212

20 Adjacent Properties

There are no adjacent properties to report.

21 Other Relevant Data and Information

Ergo is committed to improving governance and transparency in the safety and management of TSFs,

a commitment that so far has taken Ergo to implement the following:

●

an internal Tailings Performance Management System (TPMS) was implemented for dedicated

data collection, storage and processing to ensure the integrity of the data for day-to-day

management and oversight purposes;

●

quarterly drone surveillance; and

●

review of historical Interferometric Synthetic Aperture Radar (InSAR) imagery for mapping

ground deformation over large areas.

An eternal Tailings Review Panel review panel has been in place since 2018.

The QPs and Ergo have a number of internal controls to manage risk and uncertainty in the Mineral

Resource and Mineral Reserve estimation process. Monthly meetings are held with the Ergo MRM

Manager and the Ergo/DRDGOLD Finance team to discuss any concerns or areas requiring further work.

In addition to these meeting, the QPs liaise with the relevant specialists on an on-going basis to check

on progress of a number of technical programs.

There is no other known available relevant data or information material to the discussed properties in

this regard.

Technical Report Summary of the material Tailings Storage Facilities

213

22 Interpretation and Conclusions

The QP concludes that the protocols for drilling, sampling preparation and analysis, verification, and

security meet industry standard practices and are appropriate for the purposes of a Mineral Resource

estimate. The initial assessments have found that the Ergo TSFs have reasonable prospects for economic

extraction. The QP is satisfied with the QA developed by The RVN Group and the QC program

implemented, as there was no significant bias in reporting data.

The QP contends that the assumptions, parameters and methodology used for the Mineral Resource

estimate are appropriate for the style of mineralization and deposit type.

The tonnage and content of the TSFs are as expected and can be processed in the current Ergo

processing plant. TSFs and sand dumps reported in this document have sufficient information to be used

in the Mineral Reserve estimates and demonstrate economic viability.

The identified risks that could affect the Mineral Resources and Mineral Reserves are:

●

rising electricity prices and Eskom supply distribution;

●

depositional capacity;

●

social unrest;

●

increased crime;

●

depletion of Ergo’s Mineral Reserves;

●

dependency on key suppliers;

●

social licenses to operate;

●

fluctuation of the gold price and the exchange rate;

●

extreme weather; and

●

supply and cost of water.

23 Recommendations

There is sufficient information to allow for decision-making in the future. Accordingly, no additional work

is recommended.

Technical Report Summary of the material Tailings Storage Facilities

214

24 References

Alakangas, Eija. (2015). Quality guidelines of wood fuels in Finland VTT-M-04712-15.

10.13140/RG.2.1.3290.3127.

Ellis. L., 2021. Ergo Closure Cost Assessment 2021, Digby Wells Environmental, Project Number ERG7002.

June 2021. Unpublished.

Engles, J., (n.d.). Tailings Info. Sourced July 2022 - https://www.tailings.info/technical/hydraulic.htm

Goldprice, 2022. Sourced July 2022 - https://goldprice.org/gold -price-today/2022-06-30

Macrotrends. (2022). Sourced July 2022 - (https://www.macrotrends.net/1333/historical-gold-prices-100-

year-chart)

Mudau, M., 2017. Procedure for drilling management, logging, sampling and analysis of the material

from Tailings Storage Facility. The RVN Group. Johannesburg. The RVN Group. Unpublished.

Mudau, M., 2020. Technical Report of the Daggafontein Tailings Storage Facility. The RVN Group.

Johannesburg. The RVN Group. Unpublished.

Mudau, M. and Rupprecht, S.M., 2020a. Technical Report of the Marievale Tailings Storage Facility. The

RVN Group. Johannesburg. The RVN Group. Unpublished.

Mudau, M. and Rupprecht, S.M., 2020b. Technical Report of the Grootvlei Tailings Storage Facility. The

RVN Group. Johannesburg. The RVN Group. Unpublished.

Mudau, M. and Rupprecht, S.M., 2020c. Technical Report of the Rooikraal Tailings Storage Facility. The

RVN Group. Johannesburg. The RVN Group. Unpublished.

25 Reliance on Information Provided by Registrant

The QPs relied on the following information provided by the registrant:

●

legal matters about the Mining and Prospecting Rights. The QPs considered it reasonable to rely

on registrant’s legal opinion (legal or permitting matters are discussed in Item 1.3, Item 3.3 to Item

3.6 and Item 17.2.6);

●

environmental matters discussed in Item 17.3 and Item 19.3.6 relating to Ergo compliance;

●

Ergo commits or plans to provide to local individuals or groups (Item 17.3);

●

macroeconomic trends, data, and assumptions and interest rates (Item 16); and

●

marketing information and plans (Item 16).

The QPs considered it reasonable to rely on the above information as the registrant has the necessary

expertise and has been in operation for more than 20 years of successful and profitable retreatment of

TSFs and sand dumps. The QP also found that the data provided aligns with the industry norms. The QPs

have no reason to believe that any material facts had been withheld or misstated.

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215

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216

26 Qualified Persons Disclosure Consent

We, the signees, in our capacity as Qualified Persons in connection with the Technical Report Summary

of Ergo Mining Proprietary Limited dated 28 October 2022 (The Technical Report Summary) as required

by Item 601(b)(96) of Regulation S-K and filed as an exhibit to DRDGOLD Limited’s (DRDGOLD) annual

report on Form 20-F for the year ended 30 June 2022 and any amendments or supplements and/or

exhibits thereto (collectively, the “Form 20-F”) pursuant to Subpart 1300 of Regulation S-K promulgated

by the U.S. Securities and Exchange Commission (1300 Regulation S-K), each hereby consent to:

●

the public filing and use by DRDGOLD of the Technical Report Summary for which I am

responsible as an exhibit to the Form 20-F;

●

the use and reference to my name, including my status as an expert or Qualified Person (as

defined by SK-1300) in connection with the Form 20-F and Technical Report Summary for which

I am responsible;

●

use of any extracts from, or summary of, the Technical Report Summary in the Form 20-F and the

use of any information derived, summarized, quoted or referenced from the Technical Report

Summary, or portions thereof, that is included or incorporated by reference into the Form 20-F;

and any amendments or supplements thereto.

I am responsible for authoring, and this consent pertains to, the Technical Report Summary (Table 26.1)

for which my name appears below and certify that I have read the 20-F and that it fairly and accurately

represents the information in the Technical Report Summary for which I am responsible.

Table 26.1: Qualified Person’s Details

Property Name

TRS Effective

Date

QP Name

Affiliation to

Registrant

Field or Area of

Responsibility

Signature

Ergo Mining

Proprietary Limited 

(A subsidiary of

DRDGOLD Limited)

30 June 2022

Professor Steven

Rupprecht

Independent

Consultant

Item 1 and 

12 to 19I

/s/ Steven

Rupprecht

Ergo Mining

Proprietary Limited 

(A subsidiary of

DRDGOLD Limited)

30 June 2022

Mr Mpfariseni

Mudau

Independent

Consultant

 Item 1 to 11 and

 20 to 25

/s/ Mpfariseni

Mudau