DRDGOLD : responds to the bench marks foundation report, 'waiting to inhale'

29 August 2017

Johannesburg, South Africa. 29 August 2017. DRDGOLD Limited (DRDGOLD; JSE, NYSE: DRD), has issued the following response to a report launched this morning by the Bench Marks Foundation, entitled 'Waiting to Inhale':

DRDGOLD has recently received the Bench Marks Foundation's (BMF) report, entitled Waiting to Inhale.

As an opening remark we have to record our disappointment that BMF again failed to engage with us in the compilation of its report, even after such engagement was offered.

A second, and perhaps even more important concern, is the lack of independent, credible research in support of the allegations BMF levels against our operating footprint and the effect it has on surrounding communities.

At the outset, we wish to place on record, that our aim - as a company - is to improve the quality of life of those living within our areas of influence. This means that, in addition to investments we make in social and economic capital, we seek to preserve, protect and even improve the state of the footprint on which we operate (in many instances an inherited legacy) in order to also yield a nature dividend.

To this end, we have rehabilitated and vegetated dumps at a cost of hundreds of millions of Rands in the last 10 years. This has brought about a very significant decline in dust emissions from these dumps - to the point where, this year, there were fewer than five exceedances of the regulatory thresholds, the fact that it was one of the driest years in history notwithstanding. (A recent set of photographs on the state of these dumps will be placed on our website shortly).

Another reality that we face as a company and a country is urbanisation and the growth of informal settlements. In many cases, both formal and informal settlements have encroached on land that has been designated as industrial. The recommendation of a 2 000m buffer between residential areas and mine dumps has largely been ignored by the authorities, as has the requirement that no dwellings may be erected closer than 500m to a mine dump. Today, urban developments accommodating between 300 000 and 400 000 people have encroached to within the buffer zones.

There are various points made repeatedly throughout the report and on which the BMF has made recommendations which we will address:

• The suggestion is made that all mine dumps should be fenced and signposted. To be fair, at some stage, every mine dump has in fact either been fenced off/and or signposts have been clearly displayed. The authors must be aware that any infrastructure that is potentially portable and convertible to cash, is removed, and will have to be regularly replaced. As will be known from recent illegal mining activity, not even concrete seals of mine shafts will prevent incursions into mining areas.
• Comments are made that wind-blown dust frequently exceeds limits. Whilst we acknowledge that there are a number of abandoned mine dumps in and around the Johannesburg area from which dust emanates, our operations are well contained and pose no health risk and negligible public nuisance. Our most recently published data - in our integrated report for 2016, accessible on our website -shows we reduced our number of exceedances from 31 in 2015, 2.1% of the total number of measurements - to 22 in 2016, 1.6% of the total number of measurements. Our 2017 figures to mid-June 2017 show further improvement to just five exceedances during the period, 0.41% of the total number of measurements. We would be happy to have third-party experts review and assess our reports.

  Our progress in reducing dust is directly attributable to the success of our systematic vegetation programme. This programme's impact - at the Crown Tailings Complex and the Brakpan Tailings Complex - is clearly visible from kilometres away in all directions. In six years, we have vegetated a total of 244 hectares at the Crown Tailings Complex at a cost of R143.6 million. We expect to complete the programme by 2015, at a total cost of R240 million.

• Another comment is that dust buckets are not the most modern, effective way of measuring dust fallout. Certainly, it is our view - and it is supported by experts in this area - that dust buckets are, in fact, absolutely fit for purpose. Dust buckets are the recommended measuring tool as per the NATIONAL ENVIRONMENTAL MANAGEMENT: AIR QUALITY ACT, 2004; (ACT NO. 39 OF 2004) NATIONAL DUST CONTROL REGULATIONS. ASTM D1739 - 1970.
• The comment is made that wind-blown mine dust is toxic. There is no credible research in support of this assumption.
• The comment is made that there are frequent spills into the Booysens River and surface streams in Diepkloof. This statement is factually incorrect and irresponsible. As far as DRDGOLD is concerned, a single leak occurred from one of its pipeline in the vicinity of the Russell Stream in February 2016. The circumstances around this spill and the remedial action taken are all well documented and were reported to the Department of Mineral Resources and the Department of Water Affairs and Sanitation.

  The images contained in BMF's report are of water samples taken from evaporation ponds and solution trenches. These are, in fact, part of the environmental containment measures we put in place to contain the effect of mining on the environment. This run-off is returned to our internal water cycle. This has been pointed out to BMF before. We therefore reject these averments as misleading and as a disingenuous distortion of the truth.

• A statement is made that DRD operates without a water use licence. To the extent that this statement is aimed to suggest that we are using water without proper authority, this is simply not true. Each of our operations, Crown, City, Knights and Ergo obtained and are operating in terms of either Water Usage Licenses or usage permits.

Another comment made is that communities are inadequately informed. DRDGOLD is party to two forums - the Ergo forum in the east, the Crown forum in the west. These forums meet regularly with community representation and varying levels of community participation. The minutes of the DRDGOLD/Riverlea Community Forum included in BMF's report shows how extensive information-sharing, discussion and posing and answering of questions is at such meetings. We do get a sense, though, that while the information sharing at the forum is extensive, further distribution of information into the greater stakeholder base is limited. DRDGOLD is therefore investigating launching a social media platform for information-sharing into a far broader stakeholder base. A great source of frustration for the company is the burning of vegetation which causes significant damage to infrastructure and sets back the progress made. A welcome intervention would be for communities to assume part-responsibility to intervene when they witness attempts to sabotage our work and to also provide guidance to community members to act responsibly.

Despite the fact that BMF has chosen, again, not to engage with DRDGOLD, or to confirm its facts, or to undertake valid research, our door remains open to engage, provided such engagement is open, honest and fair.

South Africa & North America
Investor and Media Relations

James Duncan
R&A Strategic Communications
+27 11 880 3924 (office)
+27 (0) 79 336 4010 (mobile)

United Kingdom/Europe
Investor and Media Relations
Phil Dexter, St James's Corporate Services
+44 (0) 20 7796 8644 (office)
+44 (0) 779 863 4398 (mobile)

For more information, please visit www.drdgold.com

Forward looking Statements

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