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INTEGRATED REPORT 2013

Above: Netting has been installed on tailings dams to address wind speed and direction

Strategy and resource allocation

Our strategy is outlined below and the implementation of the strategy forms the basis of the various sections in this report.

Our strategy

DRDGOLD’s strategy is to enhance shareholder value in the short and medium term by continuing to produce gold ounces from our 11Moz resource while simultaneously:

This strategy involves using our various capitals – human, financial, intellectual and manufactured – to extract gold from extensive surface resources in the safest and most efficient manner, thus ensuring the sustainability of our social and environmental capital.

It also involves realising the value of the underground ounces associated with ERPM Extensions 1 and 2, an asset that no longer fits our strategy and is for sale.

DRDGOLD’s long-term strategy is to improve gold recovery so that, in future, zero gold is returned to tailings deposition facilities along with the discarded material; and to growing its reclamation business by:

Challenges that might affect this strategy, and our performance, are discussed in more detail in the section Key opportunities and risks.

Strategic focus areas

Our key strategic focus areas support the achievement of our target outcomes which are measured and re-evaluated on an ongoing basis. These target outcomes are reflected in the strategic focus areas referred to below.

Effectively exploiting our large surface gold resources results in
Successfully exploiting our 11Moz surface gold resource by improving recoveries using better technology and innovation
Reducing risk and creating opportunities results in
Effectively monitoring, evaluating and responding to risks, whilst taking advantage of opportunities to create value for all stakeholders by optimising assets for future growth
Controlling costs and maximising margins results in
Ensuring that full value is realised from our products, maintaining consistent volumes, improving extraction efficiencies, using better technology and managing costs to protect margins and returns
Assuming our social and environmental responsibilities results in
Developing business and social partnerships based on mutual value creation while maintaining a focus on ensuring the safety and well-being of employees, and managing environmental and other impacts
Embracing technology and innovation results in
Improving gold recovery and operational efficiencies through continued R&D, the use of new technologies and encouraging a culture of innovation

Measuring achievements and target outcomes

Strategic focus area Key performance indicator Target outcomes
Effectively exploiting our large surface gold resources Return on equity
Dividend yield
Return on equity of 15%
Dividend yield of 4% to 5%
Reducing risk and creating pportunities Share price – cents per share Share price performance outperforming the JSE gold index
Controlling costs and maximising margins All-in sustaining costs (AISC) – R/kg
AISC margin – %
Achieving budgeted AISC
Achieving AISC margin of 15%
Assuming our social and environmental responsibilities Number of employees receiving training
Number of community learners completing courses
Number of reportable environmental
incidents
Achieving employee training targets

Achieving community learner targets

Reducing in reportable incidents
Embracing technology and innovation Gold recovery efficiencies – %
Gold production – oz
Improving gold recoveries by 16% to 20%
Achieving budgeted gold production