UNITED STATESSECURITIES AND
EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 20-F ☐
 REGISTRATION STATEMENT PURSUANT TO
  SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☑
 ANNUAL REPORT PURSUANT TO SECTION 13
  OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐
 TRANSITION REPORT PURSUANT TO
  SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐
 SHELL COMPANY REPORT PURSUANT TO SECTION 13
  OR 15(d) OF THE SECURITIES EXCHANGE ACT 1934For the fiscal year ended June 30, 2018
 Commission file number 0-28800  DRDGOLD LIMITED (Exact name of Registrant as specified in its
charter and translation of Registrant's name into English) REPUBLIC OF SOUTH AFRICA
  (Jurisdiction of incorporation or
  organization)1 Sixty Jan Smuts Building, 2nd Floor -
  North Tower, 160 Jan Smuts Avenue, Rosebank, 2196, South Africa
  (Address of principal executive offices)
  Riaan Davel, Chief Financial Officer, Tel.
  no. +27 11 470 2600, Email riaan.davel@drdgold.com
  Francois Bouwer, Group Financial Accountant,
  Tel. no. +27 11 470 2600, Emailfrancois.bouwer@drdgold.com
  1 Sixty Jan Smuts Building, 2nd Floor -
  North Tower, 160 Jan Smuts Avenue, Rosebank, 2196, South Africa
  (Name, Telephone, Email and/or Facsimile
  number and Address of Company Contact Person)
 Securities registered or to be registered
pursuant to Section 12(b) of the Act Title of each class:
 Name of each exchange on which registered:Ordinary shares (traded in the form of
  American Depositary Shares, each American Depositary Share representing ten
  underlying ordinary shares.)
 The New York Stock Exchange, Inc.
 Securities registered or to be registered
pursuant to Section 12(g) of the ActNone Securities for which there is a reporting
obligation pursuant to Section 15(d) of the ActNone Indicate the number of outstanding shares of
each of the issuer's classes of capital or common stock as of the close of the
period covered by the annual report. As of June 30, 2018, the
Registrant had outstanding 431,429,767 ordinary shares, of no par value. Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  
Yes☐No☑ If this report is an annual report or
transition report, indicate by check mark if the registrant is not required to
file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934.   Yes☐No☑ Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past
90 days.       Yes☑No☐ Indicate by check mark whether the registrant has submitted
electronically every Interactive Date File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (section 232-405 of this chapter) during
the preceding 12 months (or for such shorter period that the registrant was
required to submit such files). Yes☑No☐ Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or
an emerging growth company. See definition of “large accelerated filer,”
“accelerated filer,” and “emerging growth company” in Rule 12b-2 of the
Exchange Act. Large accelerated filer☐Accelerated
filer☑Non-accelerated filer☐Emerging growth company☐ If any emerging growth company that prepares
its financial statements in accordance with U.S. GAAP, indicate by check mark
if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act☐ The term “new or revised financial
accounting standard” refers to any update issued by the Financial Accounting
Standards Board to its Accounting Standards Codification after April 5, 2012. Indicate by check mark which basis of
accounting the registrant has used to prepare the financial statements included
in this filing.U.S. GAAP☐International Financial Reporting
Standards as issued by the IASB☑Other☐ If “Other” has been checked in response to
the previous question, indicate by check mark which financial statement item
the registrant has elected to follow.   Item 17☐Item 18☐ If this is an annual report, indicate by
check mark whether the registrant is a shell company (as defined in Rule 12b-2
of the Exchange Act).   Yes☐No☑


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TABLE OF CONTENTSPagePART IITEM 1.
 IDENTITY OF DIRECTORS, SENIOR MANAGEMENT
  AND ADVISERS
 5ITEM 2.
 OFFER STATISTICS AND EXPECTED TIMETABLE
 5ITEM 3.
 KEY INFORMATION
 53A.
 Selected Financial Data
 53B.
 Capitalization And Indebtedness
 73C.
 Reasons For The Offer And Use Of Proceeds
 73D.
 Risk Factors
 7ITEM 4.
 INFORMATION ON THE COMPANY
 204A.
 History And Development Of The Company
 204B.
 Business Overview
 214C.
 Organizational Structure
 294D.
 Property, Plant And Equipment
 30ITEM
  4A.
 UNRESOLVED STAFF COMMENTS
 37ITEM 5.
 OPERATING AND FINANCIAL REVIEW AND
  PROSPECTS
 385A.
 Operating Results
 385B.
 Liquidity And Capital Resources
 495C.
 Research And Development, Patents And
  Licenses, Etc
 505D.
 Trend Information
 515E.
 Off-Balance Sheet Arrangements
 515F.
 Tabular Disclosure Of Contractual
  Obligations
 515G.
 Safe Harbor
 51ITEM 6.
 DIRECTORS, SENIOR MANAGEMENT AND
  EMPLOYEES
 516A.
 Directors And Senior Management
 516B.
 Compensation
 536C.
 Board Practices
 556E.
 Share Ownership
 59ITEM 7.
 MAJOR SHAREHOLDERS AND RELATED PARTY
  TRANSACTIONS
 617A.
 Major Shareholders
 617B.
 Related Party Transactions
 627C.
 Interests Of Experts And Counsel
 62ITEM 8.
 FINANCIAL INFORMATION
 628A.
 Consolidated statements And Other
  Financial Information
 628B.
 Significant Changes
 62ITEM 9.
 THE OFFER AND LISTING
 639A.
 Offer And Listing Details
 639B.
 Plan Of Distribution
 649C.
 Markets
 649D.
 Selling Shareholders
 649E.
 Dilution
 649F.
 Expenses Of The Issue
 64ITEM
  10.
 ADDITIONAL INFORMATION
 6410A.
 Share Capital
 6410B.
 Memorandum of Incorporation
 6410C.
 Material Contracts
 6710D.
 Exchange Controls
 6910E.
 Taxation
 7110F.
 Dividends And Paying Agents
 7410G.
 Statement By Experts
 7410H.
 Documents On Display
 7410I.
 Subsidiary Information
 74ITEM
  11.
 QUANTITATIVE AND QUALITATIVE DISCLOSURES
  ABOUT MARKET RISK
 75ITEM
  12.
 DESCRIPTION OF SECURITIES OTHER THAN
  EQUITY SECURITIES
 7612A.
 Debt Securities
 7612B.
 Warrants and Rights
 7612C.
 Other Securities
 7612D
 American Depositary Shares
 76


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TABLE OF CONTENTSPART IIITEM 13.
 DEFAULTS, DIVIDEND ARREARAGES AND
  DELINQUENCIES
 77ITEM 14.
 MATERIAL MODIFICATIONS TO THE RIGHTS OF
  SECURITY HOLDERS AND USE OF PROCEEDS
 77ITEM 15.
 CONTROLS AND PROCEDURES
 77ITEM 16A.
 AUDIT COMMITTEE FINANCIAL EXPERT
 78ITEM 16B.
 CODE OF ETHICS
 78ITEM 16C.
 PRINCIPAL ACCOUNTANT FEES AND SERVICES
 78ITEM 16D.
 EXEMPTIONS FROM THE LISTING STANDARDS FOR
  AUDIT COMMITTEES
 79ITEM 16E.
 PURCHASES OF EQUITY SECURITIES BY THE
  ISSUER AND AFFILIATED PURCHASERS
 79ITEM 16F
 CHANGE IN REGISTRANT'S CERTIFYING
  ACCOUNTANT
 79ITEM 16G.
 CORPORATE GOVERNANCE
 79ITEM 16H.
 MINE SAFETY DISCLOSURES
 79PART IIIITEM 17.
 FINANCIAL STATEMENTS
 80ITEM 18.
 FINANCIAL STATEMENTS
 80ITEM 19.
 EXHIBITS
 1


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Preparation
of Financial Information  We
are a South African company and currently all our operations are located in
South Africa. Accordingly, our books of account are maintained in South African
Rand.Our financial
statements included in our corporate filings are prepared in accordance with
International Financial Reporting Standards (IFRS), as issued by the
International Accounting Standards Board (IASB) for the financial years ended
June 30, 2018, 2017 and 2016 included in this report. All references to “dollars” or “$” herein are to United States
Dollars and references to “rand” or “R” are to South African rands.  Our consolidated financial
statements included in this Annual Report are prepared in accordance with IFRS
as issued by the IASB. All financial information, except as otherwise noted is
stated in accordance with IFRS as issued by the IASB.  We present our financial information in
rand, which is our presentation and reporting currency. Solely for your
convenience, this Annual Report contains translations of certain rand amounts
into dollars at specified rates. These rand amounts do not represent actual
dollar amounts, nor could they necessarily have been converted into dollars at
the rates indicated. Unless otherwise indicated, rand amounts have been
translated into dollars at the rate of R14.16 per $1.00, the noon buying rate
in New York City on September 28, 2018.  In
this Annual Report, we present certain non-IFRS financial measures such as the
financial items “cash operating costs per kilogram”, “all-in sustaining costs
per kilogram” and “all-in costs per kilogram” which have been determined using
industry guidelines promulgated by the World Gold Council, which we use to
determine costs associated with producing gold, cash generating capacities of
the mines and to monitor performance of our mining operations. An investor
should not consider these items in isolation or as alternatives to, operating
costs, profit/(loss) for the year or any other measure of financial performance
presented in accordance with IFRS or as an indicator of our performance. While
the World Gold Council has provided definitions for the calculation of cash
operating costs, the calculation of cash operating costs per kilogram, all-in
sustaining costs and all-in costs per kilogram may vary significantly among
gold mining companies, and these definitions by themselves do not necessarily
provide a basis for comparison with other gold mining companies. See Glossary
of Terms and Explanations and Item 5A. Operating Results – “Cash operating
costs, all-in sustaining costs and all-in costs” and “Reconciliation of cash operating
costs per kilogram, all-in sustaining costs per kilogram, all-in costs per
kilogram”.  DRDGOLD Limited  When
used in this Annual Report, the term the “Company” refers to DRDGOLD Limited
and the terms “we,” “our,” “us” or “the Group” refer to the Company and its
subsidiaries, associates and joint ventures, as appropriate in the context.  Acquisition of WRTRP Assets from
Sibanye-Stillwater  On July 31, 2018, we completed the acquisition of
the gold assets associated with Sibanye Gold Limited, trading as
Sibanye-Stillwater’s (“Sibanye-Stillwater”) West Rand Tailings Retreatment
Project (WRTRP), to be known going forward as Far West Gold Recoveries
Proprietary Limited (FWGR).  This acquisition represents a significant increase
in our assets, which we expect will impact our results in future years.  In
connection with the acquisition, we issued to Sibanye-Stillwater new shares
equal to 38.05% of outstanding shares, and granted Sibanye-Stillwater an option
to acquire up to a total of 50.1% of our shares for a period of 2 years from
the effective date of the acquisition at a 10% discount to the prevailing
market value (the “Sibanye-Stillwater option”).  SpecialNote Regarding Forward-Looking Statements  This
Annual Report contains certain “forward-looking” statements within the meaning
of Section 21E of the U.S. Securities Exchange Act of 1934, regardingexpectedfuture events or otherexpectedfuture financial performance and information
relating to us that are based on the beliefs of our management, as well as
assumptions made by and information currently available to our management. Some
of these forward-looking statements include phrases such as “anticipates,”
“believes,” “could,” “estimates,” “expects,” “intends,” “may,” “should,” or
“will continue,” or similar expressions or the negatives thereof or other
variations on these expressions, or similar terminology, or discussions of
strategy, plans or intentions, includingstatements in connection with, or relating
to, among other things: ·our reserve calculations and underlying
assumptions; ·the trend information discussed in Item 5D.-
Trend Information, including target gold production and cash operating costs; ·estimated
future throughput capacity and production; ·expected
trends in our gold production as well as the demand for and the price of gold; ·our
anticipated labor, electricity, water, crude oil and steel costs; ·our ability
to fund our operations in the next 12 months including our anticipated
commitments; ·estimated
production costs, cash operating costsper
ounce, all-in sustaining costs per ounce and all-in costs per ounce; ·expectations
on future gold price, supply and pricing trends; ·expected
gold production and cash operating costs expected in fiscal year 2019; ·our
subsidiaries’ prospects in litigation and disputes; ·statements
with respect toWRTRP
assets acquired from Sibanye-Stillwater and the option granted to
Sibanye-Stillwater;and ·expected
effective gold mining tax rate.


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Such statements reflect our
current views with respect to future events and are subject to risks,
uncertainties and assumptions. Many factors could cause our actual results,
performance or achievements to be materially different from any future results,
performance or achievements that may be expressed or implied by such
forward-looking statements, including, among others: ·adverse changes or uncertainties in general economic conditions in
South Africa; ·regulatory developments adverse to us or difficulties in
maintaining necessary licenses or other governmental approvals; ·changes in our competitive position; ·changesin, orthat affect our business strategy; ·adverse
changes in our gold production as well as the demand for and the price of gold; ·any major disruption in production at our key facilities; ·adverse changes in foreign exchange rates; ·adverse environmental changes; ·adverse changes in ore grades and recoveries, and to the quality
or quantity of reserves; ·unforeseen technical production issues, industrial accidents and
theft; ·anticipated capital expenditure on property, plant and equipment; ·future performance relating to the WRTRP assets and whether or not
the Sibanye-Stillwater option is exercised;and ·various other factors, including those set forth inItem 3D. Risk Factors.  For a discussion of such risks, see Item 3D. Risk
Factors. The risk factors described in Item 3D. could affect our future
results, causing these results to differ materially from those expressed in any
forward-looking statements. These factors are not necessarily all of the
important factors that could cause our results to differ materially from those
expressed in any forward-looking statements. Other unknown or unpredictable
factors could also have material adverse effects on future results.  Investors are cautioned not to place undue reliance
on these forward‐looking statements, which speak only as of the date
thereof. We do not undertake any obligation to update publicly or release any
revisions to these forward‐looking statements to reflect events or
circumstances after the date of this Annual Report or to reflect the occurrence
of unanticipated events.  SpecialNote Regarding Links to External, or Third-party Websites  Links
to external, or third-party websites, are provided solely for convenience. We
take no responsibility whatsoever for any third-party information contained in
such third-party websites, and we specifically disclaim adoption or
incorporation by reference of such information into this report.  Imperial units of measure and metric
equivalents  The table below sets forth units stated in this document, which
are measured in Imperial and Metric.  Metric
 Imperial
 Imperial
 Metric1 metric tonne
 1.10229 short tons
 1 short ton
 0.9072 metric tonnes1 kilogram
 2.20458 pounds
 1 pound
 0.4536 kilograms1 gram
 0.03215 troy ounces
 1 troy ounce
 31.10353 grams1 kilometer
 0.62150 miles
 1 mile
 1.609 kilometers1 meter
 3.28084 feet
 1 foot
 0.3048 meters1 liter
 0.26420 gallons
 1 gallon
 3.785 liters1 hectare
 2.47097 acres
 1 acre
 0.4047 hectares1 centimeter
 0.39370 inches
 1 inch
 2.54 centimeters1 gram/tonne
 0.0292 ounces/ton
 1 ounce/ton
 34.28 grams/tonnes0 degree Celsius
 32 degrees Fahrenheit
 0 degrees Fahrenheit
 - 18 degrees Celsius
 2


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Glossary
  of Terms and ExplanationsThe
  table below sets forth a glossary of terms used in this Annual Report:Administration
  expenses and other costs excluding non-recurring items
 Administration expenses and other costs
  excluding loss on disposal of property, plant and equipment and transaction
  costs.All-in
  sustaining costs per kilogram
 All-in sustaining costs is a measure on
  which guidance is provided by the World Gold Council and include cash
  operating costs of production, plus movement in gold in process on a sales
  basis, corporate administration expenses and other (costs)/income, the
  accretion of rehabilitation costs and sustaining capital expenditure. Costs
  other than those listed above are excluded. All-in sustaining costs per
  kilogram are calculated by dividing total all-in sustaining costs by
  kilograms of gold produced. This is a non‐IFRS financial measure and
  should not be considered a substitute measure of costs and expenses reported
  by us in accordance with IFRS.All-in
  costs per kilogram
 All-in costs is a measure on which
  guidance is provided by the World Gold Council and include all-in sustaining
  costs, retrenchment costs, care and maintenance costs, ongoing rehabilitation
  expenditure, growth capital expenditure and capital recoupments. Costs other
  than those listed above are excluded. All-in costs per kilogram are
  calculated by dividing total all-in costs by kilograms of gold produced. This
  is a non‐IFRS financial measure and should not be considered a
  substitute measure of costs and expenses reported by us in accordance with
  IFRS.Assaying
 The chemical testing process of rock
  samples to determine mineral content.$/oz
 US dollar per ounce.Called
  gold content
 The theoretical gold content of material
  processed.Capital
  expenditure
 Purchases of property, plant and
  equipment paid in cash.Care
  and maintenance
 Costs to ensure that the Ore Reserves are
  open, serviceable and legally compliant after active mining activity at a
  shaft has ceased.Cash
  operating costs of production
 Cash operating costs of production are
  operating costs less ongoing rehabilitation expenses, care and maintenance
  costs and net other operating costs/(income). This is a non‐IFRS
  financial measure and should not be considered a substitute measure of costs
  and expenses reported by us in accordance with IFRS.Cash
  operating costs per kilogram
 Cash operating costs are operating costs
  incurred directly in the production of gold and include labor costs,
  contractor and other related costs, inventory costs and electricity costs.
  Cash operating costs per kilogram are calculated by dividing cash operating
  costs by kilograms of gold produced. This is a non‐IFRS financial
  measure and should not be considered a substitute measure of costs and
  expenses reported by us in accordance with IFRS.Cut‐off
  grade
 The minimum in-situ grade of ore blocks
  for which the cash operating costs per ounce, excluding overhead costs, are
  equal to a projected gold price per ounce.CIL
  Circuit
 Carbon-in-leach circuit.Depletion
 The decrease in the quantity of ore in a
  deposit or property resulting from extraction or production.Deposition
 Deposition is the geological process by
  which material is added to a landform or land mass. Fluids such as wind and
  water, as well as sediment flowing via gravity, transport previously eroded
  sediment, which, at the loss of enough kinetic energy in the fluid, is
  deposited, building up layers of sediment. Deposition occurs when the forces
  responsible for sediment transportation are no longer sufficient to overcome
  the forces of particle weight and friction, creating a resistance to motion.Doré
 Unrefined gold and silver bullion bars
  consisting of approximately 90% precious metals which will be further refined
  to almost pure metal.EBITDA
 Earnings before interest, tax,
  depreciation and amortisation.Grade
 The amount of gold contained within
  auriferous material generally expressed in ounces per ton or grams per tonne
  of ore.Growth
  capital expenditure
 Capital expenditures that are not
  sustaining capital expenditure. This is a non‐IFRS financial measure
  and should not be considered a substitute measure of costs and expenses
  reported by us in accordance with IFRS.g/t
 Grams per tonne.Metallurgical
  plant
 A processing plant (mill) erected to
  treat ore and extract the contained gold.Mine
  call factor
 The gold content recovered expressed as a
  percentage of the called gold content.Mt
 Million tons.Ore
 A mixture of valuable and worthless
  materials from which the extraction of at least one mineral is technically
  and economically viable.Other
  operating costs / (income)
 Expenses incurred, and income generated
  in the course of operating activities, which are not directly attributable to
  production activities.Pay-limit
 The minimum in-situ grade of ore blocks
  or sites for which cash operating costs, including all overhead costs, are
  equal to a projected gold price per ounce.Operating
  costs
 Operating costs are cost of sales less
  depreciation, change in estimate of rehabilitation provision, movement in
  gold in process and retrenchment costs.Proven
  Ore Reserves
 Reserves for which (a) the quantity is
  computed from dimensions revealed in outcrops, trenches, workings or drill
  holes; grade and/or quality are computed from the results of detailed
  sampling and (b) the sites for inspection, sampling and measurement are
  spaced so closely and the geologic character is so well defined that size,
  shape, depth, and mineral content of Ore Reserves are well established.Probable Ore Reserves
 Reserves for which quantity and grade
  and/or quality are computed from information similar to that used for Proven
  Ore Reserves, but the sites for inspection, sampling, and measurement are farther
  apart or are otherwise less adequately spaced. The degree of assurance,
  although lower than that for Proven Ore Reserves, is high enough to assume
  continuity between points of observation.oz/t
 Ounces per ton.Refining
 The final purification process of a metal
  or mineral.Rehabilitation
 The process of restoring mined land to a
  condition approximating its original state.Reserves
 That part of a mineral deposit which
  could be economically and legally extracted or produced at the time of the reserve
  determination.Sediment
 The deposition of solid fragmental
  material that originated from weathering of rocks and was transported from a
  source to a site of deposition.Slimes
 The tailings discharged from a processing
  plant after the valuable minerals have been recovered.Sustaining
  capital expenditure
 Sustaining capital expenditure are those
  capital expenditures that are necessary to maintain current gold production.
  This is a non‐IFRS financial measure and should not be considered a substitute
  measure of costs and expenses reported by us in accordance with IFRS.t’000
 Tonnes in thousands.Tailings
 Finely ground rock from which valuable
  minerals have been extracted by milling, or any waste rock, slimes or residue
  derived from any mining operation or processing of any minerals.Tailings
  dam
 A dam created from waste material of
  processed ore after the economically recoverable gold has been extracted.Tonnage/Tonne
 Quantities where the metric tonne is an
  appropriate unit of measure. Typically used to measure reserves of
  gold‐bearing material in‐situ or quantities of ore and waste
  material mined, transported or milled.Tpm
 Tonne per month.Yield
 The amount of recovered gold from
  production generally expressed in ounces or grams per ton or tonne of ore.
 3


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4


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PART I  ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND
ADVISERS  Not
applicable.  ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE  Not
applicable.  ITEM 3. KEY INFORMATION  3A. SELECTED
FINANCIAL DATA  The
following selected consolidated financial data as at 30 June 2018 and 2017 and
for the years ended 30 June 2018, 2017 and 2016 are derived from our
consolidated financial statements set forth elsewhere in this Annual Report,
which have been prepared in accordancewith
IFRS, as issued by the IASB. These
consolidated financial statements have been audited by KPMG Inc.  The
selected consolidated financial data as at June 30, 2016, 2015 and 2014,
and for the years ended June 30, 2015 and 2014 is derived from audited
consolidated financial statements not appearing in this Annual Report which
have been prepared in accordance withIFRS,as issued by the IASB. The selected consolidated financial data set
forth below should be read in conjunction with Item 5. Operating and Financial
Review and Prospects and with the consolidated financial statements and the
notes thereto and the other financial information appearing elsewhere in this
Annual Report. 5


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Selected
  Consolidated Financial Data(in
  millions, except share, per share and ounce data)Year ended June 30,20181
 2018
 2017
 2016
 2015
 2014$’m
 R'm
 R'm
 R'm
 R'm
 R'mProfit
  or loss DataRevenue
 175.9
 2 490.4
 2,339.9
 2,433.1
 2,105.3
 1,809.4Results
  from operating activities
 3.7
 52.0
 (24.5)
 119.6
 94.9
 (12.6)Profit/(loss)
  for the year attributable to equity owners of the parent
 0.5
 6.5
 13.7
 61.9
 67.8
 (45.8)Per
  Share DataBasic
  earnings/(loss) per share (cents)
 0.1
 1.5
 3.2
 14.7
 17.4
 (12.0)Diluted
  earnings/(loss) per share (cents)
 0.1
 1.5
 3.2
 14.7
 17.4
 (12.0)Dividends
  proposed per share for the year (ZAR cents)
 
 5.0
 5.0
 62.0
 10.0
 2.0Dividends
  proposed per American Depositary Shares for the year         (USD cents)
 
 4.2
 3.7
 45.2
 6.5
 1.6Exchange
  rate (USD1:ZAR)1
 
 14.16
 13.51
 13.72
 13.82
 10.42Intraday
  high (USD1:ZAR)
 
 14.57
 14.75
 16.87
 12.58
 11.39Intraday
  low (USD1:ZAR)
 
 11.50
 12.42
 12.24
 10.50
 9.50Number
  of shares issued as at June 30
 431 429 767
 431 429 767
 431 429 767
 431 429 767
 430 883 767
 385 383 767Statement
  of financial position dataTotal
  assets
 166.8
 2 360.4
 2,287.4
 2,419.1
 2,503.0
 2,440.7Equity
  (Net assets)
 89.5
 1 267.3
 1,302.4
 1,339.6
 1,529.9
 1,481.2Ordinary
  share capital 2
 295.1
 4 177.2
 4,177.2
 4,177.2
 4,180.9
 4,088.52018
 2018
 2018
 2018
 2018
 2018September
 August
 July
 June
 May
 AprilExchange
  Rate DataIntraday
  high (USD1:ZAR)
 15.69
 15.47
 13.92
 14.00
 12.89
 12.53Intraday
  low (USD1:ZAR)
 13.99
 13.16
 13.07
 12.50
 12.17
 11.781Translations into Dollars in this table
  are for the purpose of convenience only and are computed at the noon buying
  rate in New York City at September 28, 2018 of R14.16 per $1.00, or the
  annual average as noted. You should not view such translations as a
  representation that such amounts represent actual Dollar amounts. All other
  translations in this Annual Report are based on exchanges rates quoted by
  local financial service providers.  This line item has been prepared in
  accordance with Item 3.A(3) of Form 20-F.2Ordinary share capital as of June 30,
  2018 is stated after the deduction of R50.7 million (2017 and 2016: R50.7
  million) share capital relating to treasury shares held by the Group.
 66


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3B. CAPITALIZATION AND INDEBTEDNESS Not
applicable.  3C. REASONS FOR THE OFFER AND USE OF PROCEEDS Not
applicable.  3D. RISK FACTORS In conducting our business, we face many risks that
may interfere with our business objectives. Some of these risks relate to our
operational processes, while others relate to our business environment. It is
important to understand the nature of these risks and the impact they may have
on our business, financial condition and operating results. Some of these risks
are summarized below and have been organized into the following categories: ·Risks related to our business and operations; ·Risks related to the gold mining industry; ·Risks related to doing business in South
Africa; and ·Risks related to ownership in our ordinary shares or American
Depositary Shares (ADSs).  Risks related to our business and operations  Changes in the rand market price for gold,
which in the past has fluctuated widely, and exchange rate fluctuations affect
the profitability of our operations and the cash flows generated by those
operations.  Due
to the marginal nature of our operations any sustained decline in the market
price of gold would adversely affect us, and any decline in the price of gold
below the cost of production could result in the closure of some or all of our
operations which would result in significant costs and expenditure, such as,
incurring retrenchment costs earlier than expectedwhich
could lead to a decline in profits, or losses. In
addition, as most of our production costs are in rands, while gold is sold in
dollars and then converted to rands, our results of operation and financial
condition have been and could be in the future materially affected by an
appreciation in the value of the rand. Accordingly, any sustained decline in
the price of gold and/or the strengthening of the South African rand against
the dollar would negatively and adversely affect our business, operating
results and financial condition.  We typically do not enter into forward contracts to
reduce our exposure to market fluctuations in the dollar gold price or the
exchange rate movements of the rand. We sell gold at spot prices based on the
afternoon London Bullion Market fixing price on the day of delivery. We sell
our foreign currency at the spot price in the market on the date of trade. If
the dollar gold price should fall and/or the rand should strengthen against the
dollar, this would adversely affect us, and we may experience losses, and if
these changes result in revenue below our cost of production and remain at such
levels for any sustained period, we may be forced to curtail or suspend some or
all our operations. We might not be able to recover any losses we may incur
during that period or maintain adequate gold reserves for future exploitation.  Exchange rates are influenced by global economic
trends. In fiscal year 2018, the closing price of the rand against the dollar weakened
by 5%. In fiscal year 2017 the closing price of the rand against the dollar strengthened
by 11% compared to the prior year. In fiscal year 2016 the closing price of the
rand weakened against the dollar by 21% compared to the prior year. At
September 30, 2018 the rand traded at R14.14 = $1.00 (based on closing rates),
a 3% weakening of the rand against the Dollar from June 30, 2018.  A decrease in the dollar gold price and/or a
strengthening of the rand against the dollar would result in a decrease in our
profitability as was the case in fiscal year 2018. For all periods presented,
all of our production was from South Africa. If the rand was to appreciate
against the dollar for a continued time, our operations could experience a
reduction in cash flow and profitability and thiswould
adversely affect our business, operating results and financial condition.  A failure to acquire new Ore Reserves could negatively affect our
future cash flow, results of operations and financial condition.  New or ongoing exploration programs may not result in new mineral
producing operations that will sustain or increase our Ore Reserves. A failure
to acquire new Ore Reserves in sufficient quantities and quality to maintain or
grow the current level and quality of our reserves will negatively affect our
future cash flow, results of operations and financial condition.In addition, if we are unable to identify Ore
Reserves that have reasonable prospects for economic extraction while
maintaining sufficient controls on production and other costs, this will have a
material effect on the future viability of our operations.  Our Ore Reserves (imperial) increased from 3.0 million ounces at
June 30, 2017, to 3.3 million ounces at June 30, 2018,mainly because of a drilling program and pre-feasibility study (“PFS”) that
commenced during September 2016and continued into fiscal year2018,aimed at re-evaluating our surface gold
tailingsand specifically
performing drilling on the Rooikraal tailings deposition facility in fiscal
2018. The increase
was offset by depletion through ongoing mining activities.  Our Ore Reserves (imperial) increased from 1.8 million ounces at
June 30, 2016, to 3.0 million ounces at June 30, 2017,mainly because of a drilling program and PFS that commenced during
September 2016 aimed at re-evaluating our surface gold tailings. The increase
was offset by depletion through ongoing mining activities and other survey
adjustments.  Our Ore Reserves (imperial)
decreasedfrom 1.9million ounces at June 30, 2016, to
1.8 million ounces at June 30, 2017, mainly because 77


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of depletion through ongoing mining activities.  We may be unable to make desirable
acquisitions or to integrate successfully any businesses we acquire, including
the acquisition of WRTRP assets  Our future success may depend in part on the
acquisition of businesses or technologies intended to complement, enhance or
expand our current business or products or that might otherwise offer us growth
opportunities. The ability to complete such transactions may be hindered by a
number of factors, including potential difficulties in obtaining government
approvals. Our acquisitions, such as and including our acquisition of the WRTRP
assets from Sibanye-Stillwater effective from July 31, 2018, could fail to
achieve our financial or strategic objectives, disrupt our ongoing business and
adversely impact our results of operations.  Any acquisition that we do
make would pose risks related to the integration of the new business or technology
with our business and organization. We cannot be certain that we will be able
to achieve the benefits we expect from a particular acquisition or investment.
Acquisitions may also strain our managerial and operational resources, as the
challenge of managing new operations may divert our management from day-to-day
operations of our existing business. Furthermore, we may have difficulty
integrating employees, business systems, and technology. The controls,
processes and procedures of acquired businesses may also not adequately ensure
compliance with laws and regulations and we may fail to identify compliance
issues or liabilities. Our business, financial condition and results of
operations may be materially and adversely affected if we fail to coordinate
our resources effectively to manage both our existing operations and any
businesses we acquire.  Acquisitions can also result in unforeseen liabilities.  Moreover, our resources are
limited and our decision to pursue a transaction has opportunity costs;
accordingly, if we pursue a particular transaction, we may need to forgo the
prospect of entering into other transactions that could help us achieve our
financial or strategic objectives.  Our large projects, most
notably the development of FWGR, are subject to schedule delays and cost
overruns, and we may face constraints in financing our existing projects or new
business opportunities, which could render our projects unviable or less
profitable than planned  The development of our projects are capital
intensive processes carried out over long durations and requires us to commit
significant capital expenditure and allocate considerable management resources
in utilising our existing experience and know-how.  Projects like the development of FWGR is subject to
the risk of delays and cost overruns which are inherent in any large
construction project including,inter alia: •  shortages or unforeseen increases in the cost of equipment,
labor and raw materials; •  unforeseen design and engineering problems; •  unforeseen construction problems; •  inadequate phasing of activities; •  labor disputes; •  inadequate workforce planning or productivity of workforce; •  inadequate change management practices; •  natural disasters and adverse weather conditions; •  failure or delay of third-party service providers; and •  changes to regulations, such as environmental regulations.  In addition, significant variations in the
assumptions we make in assessing the viability of our projects, including those
relating to commodity prices, exchange rates, interest rates, inflation rates
and discount rates may adversely affect the profitability or even the viability
of our projects.  As the development of FWGR is particularly material
to DRDGOLD, significant cost overruns or adverse changes in assumptions
affecting the viability of the project could have a material adverse effect on
our business, cash flows, financial condition and prospects. The uncertainty
and volatility in the market makes it more difficult to accurately evaluate the
project economics and increases the risk that the assumptions underlying our
assessment of the viability of the project may prove correct.  Our operating cash flow and banking facilities may
be insufficient to meet our capital expenditure plans and requirements,
depending on the timing and cost of development of our existing projects and
any further projects we may pursue, as well as our operating performance and
the utilisation of our banking facilities. As a result, new sources of capital
may be needed to meet the funding requirements of these projects and to fund
ongoing business activities. Our ability to raise and service significant new
sources of capital will be a function of macroeconomic conditions, our credit
rating, our gearing and other risk metrics, the condition of the financial
markets, future gold prices, the prospects for our industry, our operational
performance and operating cash flow and debt position, among other factors.  In the event of unanticipated operating or
financial challenges, any dislocation in financial markets or new funding
limitations, our ability to pursue new business opportunities, invest in
existing and new projects, fund our ongoing business activities and pay
dividends, could be constrained, any of which could have a material adverse
effect on our business, operating results cash flows and financial condition.    88


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We may not be able to meet our
cash requirements because of a number of factors, many of which are beyond our
control.  Management’s estimates on future cash flows are
subject to risks and uncertainties, such as the rand gold price, production
volumes, recovered grades and costs. If we are unable to meet our cash
requirements out of cash flows generated from our operations, we would need to
fund our cash requirements from financing and we cannot guarantee that any such
financing would be permitted under the terms of our existing financing
arrangements, or would be available on acceptable terms, or at all.If we do
not generate sufficient cash flows or have access toadequate financing, our ability to respond to changing business
and economic conditions, make future acquisitions, react to adverse operating
results, meet our debt service obligations and fund required capital
expenditures or meet our working capital requirements may be adversely
affected.  We have incurred losses in the past and may
incur losses in the future.  We realized a profit of R6.5 million for fiscal
year 2018, R13.7 million for fiscal year 2017 and R61.9 million for fiscal year
2016.  Our profits and cash flows of our operations are
directly exposed to the rand gold price and input costs as we do not generally
hedge. Such exposure and other factors could result in us incurring losses in
the future, which would have a material adverse effect on our business,
operating results and financial condition.  Any interruption in gold production
at Ergo, currently our only mining operation generating cash flows, will have
an adverse effect on the Company.  As at September 30, 2018, we have one mining
operation generating cash flows, namely Ergo.  Ergo’s processing plants, pump stations and
the Brakpan/Withok Tailings Deposition Facility ("Brakpan/Withok
TDF") are linked through pipeline infrastructure. The Ergo plant is
currently our major processing plant.  The Ergo plant, pipeline infrastructure and the
Brakpan/Withok TDF are exposed to numerous risks, including operational down
time due to planned or unplanned maintenance, destruction of infrastructure,
spillages, higher than expected operating costs, or lower than expected
production as a result of decreases in extraction efficiencies due to
imbalances in the metallurgical process as well as inconsistent volume
throughput.  Our operations are also exposed to severe weather
events that could interrupt production. It is believed that the long-term
upward trend in global temperature is directly correlated with the increase in
global severe weather events both in terms of magnitude and frequency.  For example, fiscal
year 2015 brought a very strong El Nino event that is believed to be the cause
of drought conditions in South Africa. Municipalities where we operate put in
place water consumption restrictions with penalties if restrictions are not
adhered to. The drought ended in late calendar 2016 which resulted in the
relevant water restrictions being lifted, but future
droughts could result in similar restrictions.  Severe thunderstorms and high winds may also cause
damage to operation infrastructure that may in turn cause an interruption in
the production of gold.  Although freeboard on the Brakpan/Withok TDF is
continually monitored to maintain acceptable levels, such monitoring may not
provide adequate warning if the facility is exposed to significant rainfall.
Such incidents and other weather events may damage the facility and cause the
interruption of deposition and gold production until the facility is repaired
or alternative deposition is brought on line.  Each of theseor other weatherconditionsor other interruptionscould have a material adverse effect on our
business, operating results and financial condition.  Increased production costs could have an
adverse effecton our results of operations.  We may not be able to accurately predict and
contain further increases in our production costs. Production costs are
affected by,inter alia: •  labor stability, productivity and increases in labor costs; •  increases in electricity and water prices; •  increases in crude oil and steel prices; •  unforeseen changes in ore grades and recoveries; •  unexpected changes in the quality or quantity of reserves; •  technical production issues; •  environmental and industrial accidents; •  gold theft; •  environmental factors; and •  pollution.  Our production costs consist mainly of
materials including reagents and steel, labor, electricity, specialized service
providers, water, fuels, lubricants and other oil and petroleum based products.
Production costs have in the past, and could in the future, increase at rates
in excess of our annual expected inflation rate and result in the restructuring
of these operations at substantial cost. 99


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On April 9, 2018, Ergo signed
a one year extension of the 2016/18 Wage Agreement with the Majority Unions for
anaverage increase of 8.2% per annum across our workforcewith individual increasesranging
from 7-10% per annum. The next round of
wages and conditions of employment negotiations will commence in June 2019.  The 2016/18 Wage Agreement
does not include FWGR employees whose wage increases are currently being
negotiated.  Our initiatives to reduce costs, such as reducing
our labor force, a reduction of the corporate overhead, negotiating lower price
increases for consumables and cost controls may not be successful or sufficient
to offset the increases affecting our operations and could adversely affect our
business, operating results and financial condition.  Flooding at our discontinued underground operations
may cause us to incur liabilities for environmental damage.  If the rate of rise of water
is not controlled, water fromour abandoned underground mining areascould potentially rise and come into contact
with naturally occurring underground water or decant into surrounding
undergroundmining areasand
could ultimately also rise to surface. Progressive flooding of theseabandoned
underground mining areasand
surrounding undergroundmining areascould eventually cause the discharge of polluted water to the
surface and to local water sources.  Should underground water levels not reach a natural
subterranean equilibrium, and if underground water rises to the surface, we,
together with all other mining companies in those areas, may face claims
relating to environmental damage.  These claims may have a material adverse
effect on our business, operating results and financial condition.  Our operations are subject to extensive
environmental regulations which could impose significant costs and liabilities.  Our operations are subject to increasingly
extensive laws and regulations governing the protection of the environment
under various state, provincial and local laws, which regulate air and water
quality, hazardous waste management and environmental rehabilitation and
reclamation.Our mining and related activities have the potential to impact the
environment, including land, habitat, streams and environment near the mining
sites.Failure to comply with environmental
laws or delays in obtaining, or failures to obtain government permits and
approvals may adversely impact our operations. In addition, the regulatory
environment in which we operate could change in ways that could substantially
increase costs of compliance, resulting in a material adverse effect on our
profitability.  We have incurred, and expect to incur in the
future, expenditures to comply with theseenvironmentallaws and regulations. We have estimated our
aggregate group Provision for Environmental Rehabilitation at a net present
value of R553.4 million which is included in our statement of financial
position as at June 30, 2018 (Refer to Item 18. ‘‘Financial Statements - Note 10
– Provision for environmental rehabilitation”). However, the ultimate amount of
rehabilitation costs may in the future exceed the current estimates due to
factors beyond our control, such as changing legislation, higher than expected
cost increases, or unidentified rehabilitation costs. We fund these
environmental rehabilitation costs by making contributions over the life of the
mine to environmental trust funds or funds held in insurance instruments
established for our operations. If any of the operations are prematurely
closed, the rehabilitation funds may be insufficient to meet all the
rehabilitation obligations of those operations. The closure of mining
operations, without sufficient financial provision for the funding of
rehabilitation liabilities, or unacceptable damage to the environment,
including pollution or environmental degradation, may expose us and our
directors to prosecution, litigation and potentially significant liabilities.  Damage to tailings dams and
excessive maintenance and rehabilitation costs could result in lower production
and health, safety and environmental liabilities.  Our tailings facilities are exposed to
numerous risks and events, the occurrence of which may result in the failure,
breach or damage of such a facility. These may include sabotage, failure by our
employees to adhere to the codes of practice and natural disasters such as
excessive rainfall and seismic events, any of which could force us to stop or
limit operations. In addition, the dams could overflow or a side wall could
collapse and the health and safety of our employees and communities living
around these dams could be jeopardized. In the event of damage to our tailings
facilities, our operations will be adversely affected and this in turn could
have a material adverse effect on our business, operating results and financial
condition.  Due to the nature of our business, our
operations face extensive health and safety risks.  Gold mining is exposed to numerous risks and
events, the occurrence of which may result in the death of, or personal injury,
to employees. According to section 54 of the Mine, Health and Safety Act of
1996, if an inspector believes that any occurrence, practice or condition at a
mine endangers or may endanger the health or safety of any person at the mine,
the inspector may give any instruction necessary to protect the health or
safety of persons at the mine. These instructions could include the suspension of
operations at the whole or part of the mine. Health and safety incidents could
lead to mine operations being halted and that willincrease our unit
production costs,which could have a
material adverse effect on our business, operating results and financial
condition.     1010


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Events
may occur for which we are not insured which could affect our cash flows and
profitability.  Because of the nature of our
business, we may become subject to liability for pollution or other hazards against
which we are unable to insureor are not insured, including those in respect of past mining activities. Our
existing property, business interruption and other insurance contains certain
exclusions and limitations on coverage. The insured value for property and loss
of profits due to business interruptionis R6.4 billion,with a total loss limit of R650 million for
the 2018 financial year. Business interruption is only covered from the time
the loss occurs and is subject to time and amount deductibles that vary between
categories.  Insurance coverage may not
cover the extent of claims brought against us, including claims for
environmental, industrial or pollution related accidents, for which coverage is
not available. If we are required to meet the costs of claims, which exceed our
insurance coverage, this could have a material adverse effect on our business,
operating results and financial condition.  If we are unable to
attract and retain key personnel our business may be harmed.  The success of our business will depend, in large
part, upon the skills and efforts of a small group of management and technical
personnel including the positions of Chief Executive Officer and Chief
Financial Officer.In addition, we compete with mining and other companies on
a global basis to attract and retain key human resources at all levels with appropriate
technical skills and operating and managerial experience necessary to operate
the business.Factors critical to retaining our present
staff and attracting additional highly qualified personnel include our ability
to provide these individuals with competitive compensation arrangements, and
other benefits. If we are not successful in retaining or attracting highly
qualified individuals in key management positions, our business may be harmed.
We do not maintain “key man” life insurance policies on any members of our
executive team. The loss of any of our key personnel could delay the execution
of our business plans, which may result in decreased production, increased
costs and decreased profitability.  Operational
risk associated with our flotation and fine-grind (FFG) project.  Our flotation and fine-grind project, implemented in fiscal year 2014, is designed to
improve extraction efficiencies.  Production was temporarily suspended on April 2,
2014 due to unsatisfactory gold recoveries and low carbon absorption
efficiencies. The established Low Grade Section was brought back to steady
state and gold production stabilized during the last quarter of fiscal year
2014 and became fully operational in February 2015, treating the remainderof the Ergo plant throughput through the FFG
from this date.  The flotation and fine-grind project remains
exposed to numerous risks associated with similar projects, including
operational down time due to unplanned maintenance, destruction of
infrastructure, spillages, higher than expected operating costs, or lower than
expected production which could have a material adverse effect on our business,
operating results and financial condition.  A disruption in our information technology
systems, including incidents related to cyber security, could adversely affect
our business operations.  We rely on the accuracy, availability and
security of our information technology systems. Despite the measures that we
have implemented, including those related to cyber security, our systems could
be breached or damaged by computer viruses and systems attacks, natural or
man-made incidents, disasters or unauthorized physical or electronic access.  Any system failure, accident
or security breach could result in business disruption, theft of our
intellectual property, trade secrets (including our proprietary technology),
unauthorized access to, or disclosure of, personnel or supplier information,
corruption of our data or of our systems, reputational damage or litigation. We
may also be required to incur significant cost to protect against or repair the
damage caused by these disruptions or security breaches in the future,
including, for example, rebuilding internal systems, implementing additional
threat protection measures, defending against litigation, responding to
regulatory inquiries or actions, paying damages, or taking other remedial steps
with respect to third parties.  These threats are constantly
evolving, thereby increasing the difficulty of successfully defending against
them or implementing adequate preventative measures. While we seek to detect
and investigate all unauthorized attempts and attacks against our network, and
to prevent their recurrence where practicable through changes to our internal
processes and tools, we remain potentially vulnerable to additional known or
unknown threats. In some instances, we may be unaware of an incident or its
magnitude and effects. While we also seek to periodically review and assess our
cybersecurity policies and procedures to ensure their adequacy and
effectiveness, we cannot guarantee that we will not be susceptible to new and
emerging risks and attacks in the evolving landscape of cybersecurity threats.  In addition, from time to
time, we implement updates to our information technology systems and software,
which can disrupt or shutdown our information technology systems. Information
technology system disruptions, if not anticipated and appropriately mitigated,
could have a material adverse effect on our operations.    1111


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Risks related to the
gold mining industry  A change in the dollar price
of gold, which in the past has fluctuated widely, is beyond our control.  Historically, the gold price has fluctuated
widely and is affected by numerous industry factors over which we have no
control including: •a
significant amount of above-ground gold in the world that is used for trading
by investors; •  the physical supply of gold from
world-wide production and scrap sales, and the purchase, sale or divestment by
central banks of their gold holdings; •  the demand for gold for investment
purposes, industrial and commercial use, and in the manufacturing of jewelry; •  speculative trading activities in gold; •  the overall level of forward sales by
other gold producers; •  the overall level and cost of production
of other gold producers; •  international or regional political and
economic events or trends; •  the strength of the dollar (the currency
in which gold prices generally are quoted) and of other currencies; •  financial market expectations regarding
the rate of inflation; •  interest rates; •gold hedging and de-hedging by gold producers; and •actual or expected gold sales by central banks and the
International Monetary Fund.  During fiscal year 2018 the gold price reached a
high of U$1 366 per ounce and a low of U$1 204. Our profitability may
be negatively impacted by a decline in the gold price as we incur losses when
revenue from gold sales drops below the cost of production for an extended
period.  Economic conditions may
adversely affect the profitability of the Group’s operations.  The outlook for the global economy remains
uncertain.Economic conditions remain volatileand the demand for resources is uncertain. The uncertainty in the
outlook of resources generally and of goldmayresult in tightened credit markets, reduced
liquidity and extreme volatility in fixed income, credit, currency and equity
markets. Such conditions may adversely affect the Group’s business. For
example, tightening credit conditions may make it more difficult for the Group
to obtain financing on commercially acceptable terms or make it more likely
that one or more of our key suppliers may become insolvent and lead to a supply
chain breakdown.  The exploration of mineral properties is
highly speculative in nature, involves substantial expenditures, and is frequently
unproductive.  Exploration
is highly speculative in nature and requires substantial expenditure for
drilling, sampling and analysis of ore bodies to quantify the extent of the
gold reserve.Many gold exploration
programs, including some of ours, do not result in the discovery of
mineralization and any mineralization discovered may not be of sufficient
quantity or quality to be mined profitably. If we discover a viable deposit, it
usually takes several years from the initial phases of exploration until
production is possible.During this time, the economic feasibility of
production may change.  Moreover,
we rely on the evaluations of professional geologists, geophysicists, and
engineers for estimates in determining whether to commence or continue mining.
These estimates generally rely on scientific and economic assumptions, which in
some instances may not be correct, and could result in the expenditure of
substantial amounts of money on a deposit before it can be determined with any
degree of accuracy whether the deposit contains economically recoverable
mineralization. Uncertainties as to the metallurgical recovery of any gold
discovered may not warrant mining based on available technology.  Our future growth and profitability will depend,
in part, on our ability to identify and acquire additional mineral rights, and
on the costs and results of our continued exploration and development programs.Our business focuses mainly on the extraction of gold from tailings,
which is a volume driven exercise. Only significant deposits within proximity
of services and infrastructure that contain adequate gold content to justify
the significant capital investment associated with plant, reclamation and
deposition infrastructure are suitable for exploitation in terms of our model.
There is a limited supply of these deposits which may inhibit exploration and developments, especially in a declining
gold price environment.  Because
of these uncertainties, we may not successfully acquire additional mineral rights,
or identify new Proven and Probable Ore Reserves in sufficient quantities to
justify commercial operations in any of our operations. The costs incurred on
exploration activities that do not identify commercially exploitable reserves
of gold are not likely to be recovered and therefore are likely to be impaired.  There is uncertainty with our Ore Reserve estimates.  Our
Ore Reserve figures described in this document are the best estimates of our
current management as of the dates stated and are reported in accordance with
the requirements of Industry Guide 7 of the SEC. These estimates may not
reflect actual reserves or future production.     1212


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Should we encounter
mineralization or formations different from those predicted by past drilling,
sampling and similar examinations, reserve estimates may have to be adjusted
and mining plans may have to be altered in a way that might ultimately cause
our reserve estimates to decline. Moreover, if the rand price of gold declines,
or stabilizes at a price that is lower than recent levels, or if our labor,
water, steel, electricity and other production costs increase or recovery rates
decrease, it may become uneconomical to recover Ore Reserves, particularly
those containing relatively lower grades of mineralization. Under these
circumstances, we would be required to re-evaluate our Ore Reserves. Short-term
operating factors relating to the ability to reclaim our Ore Reserves, at the
required rate, such as an interruption or reduction in the supply of
electricity or a shortage of water may have the effect that we are unable to
achieve critical mass, which may render the recovery of Ore Reserve, or parts
of the Ore Reserve no longer feasible, which could negatively affect production
rate and costs and decrease our profitability during any given period.Estimates of reserves are based on drilling
results and because unforeseen conditions may occur in these mine dumps that
may not have been identified by the drilling results, the actual results may
vary from the initial estimates.These factors have and could
result in reductions in our Ore Reserve estimatesand as a result, our production, which could in turn adversely impact the total value of our
mining asset base and our business, operating results and financial condition.  Gold
mining is susceptible to numerous events that could have an adverse impact on a
gold mining business.  The business of gold mining is
exposed to numerous risks and events, the occurrence of which mayresult in the death of or personal injury to employees, the loss
of mining and reclamation equipment, damage to or destruction of mineral
properties or production facilities, monetary losses, delays in production,
environmental damage, loss of the license to mine and potential legal claims.
The risks and events associated with the business of gold mining include:  ·environmental hazards and pollution,
including dust generation, toxic chemicals, discharge of metals, pollutants,
radioactive materials and other hazardous material into the air and water; ·flooding, landslides, sinkhole formation,
ground subsidence, ground and surface water pollution and waterway
contamination; ·a decrease in labor productivity due to labor
disruptions, work stoppages, disease, slowdowns or labor strikes; ·unexpected decline of ore grade; ·metallurgical conditions and gold recovery; ·failure of unproven or evolving technologies; ·mechanical failure or breakdowns and ageing
infrastructure; ·energy and electrical power supply
interruptions; ·availability of water; ·injuries to employees or fatalities resulting
from falls from heights and accidents relating to mobile machinery or
electrocution; ·activities of illegal or artisanal miners; ·material and equipment availability; ·legal and regulatory restrictions and changes
to such restrictions; ·social or community disputes or
interventions; ·accidents caused from the collapse of
tailings dams; ·pipeline failures and spillages; ·safety-related stoppages; and ·corruption, fraud and theftincluding gold bullion theft.  The occurrence of any of these hazards could
delay production, increase production costs and may result in significant legal
claims.  Risks related to doing business in South
Africa  Political or economic
instability in South Africa may reduce our production and profitability.  We are incorporated in South Africa and all our
operations are currently in South Africa. As a result, political and economic
risks relating to South Africa could have a significant effect on our
production and profitability. Large parts of the South African population are
unemployed and do not have access to adequate education, health care, housing
and other services, including water and electricity. Government policies aimed
at alleviating and redressing the disadvantages suffered by most citizens under
previous governments may increase our costs and reduce our profitability. In
recent years, South Africa has experienced high levels of crime. These problems
may impede fixed inward investment into South Africa and increase emigration of
skilled workers. As a result, we may have difficulties retaining qualified
employees.  Inflation can adversely affect us.  The inflation rate in South Africa is relatively high
compared to developed, industrialized countries. As of June 2018, the
annual Consumer Price Inflation Index, or CPI, stood at 4.6% compared to 5.1%
in June 2017 and 6.3% in June 2016. Annual CPI was 4.9% as at September 30,
2018.Higher inflation in South Africa would result in an increase in
our operational costs in rand, unless such inflation is accompanied by a
concurrent devaluation of the rand against the dollar or an increase in the
dollar price of gold. Significantly higher and sustained inflation in the
future, with a consequent increase in operational costs could have a material
adverse effect on our results of operations and our financial condition and
could result in operations being discontinued or reduced or rationalized,which could reduce our profitability.


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The treatment of
occupational health diseases and the potential liabilities related to
occupational health diseases may have an adverse effect on the results of our
operations and our financial condition.  In January 2013, DRDGOLD,East Rand
Proprietary Mines Limited (“ERPM”)(“DRDGOLD Respondents”) and 23 other mining companies (“Other Respondents”)
(collectively referred to as "Respondents") were served with a court
application issued in the High Court of South Africa (“Court") for a class
certification (“Certification Application”) on behalf of former mineworkers and
dependents of deceased mineworkers (“Applicants”). In the application the
Applicants allege that the Respondents conducted underground mining operations
in a negligent and complicit manner causing the former mineworkers to contract
occupational lung diseases. The Applicants have as yet not quantified the
amounts which they are demanding from the Respondents in damages.  In May, 2016 the Court granted an order for,inter
alia,(1) certification of two industry-wide classes: a silicosis class and
a tuberculosis class, both of which cover current and former underground
mineworkers who have contracted the respective diseases (or the dependants of
mineworkers who died of those diseases); and (2) that the common law be developed
to provide that in instances where a claimant claiming general damages passed
away, the claim for general damages will be transmitted to the estate of the
deceased claimant. This order did not represent a ruling on the merits of the
Application brought against the Respondents.  An application for leave to appeal to the
Supreme Court of Appeal (“SCA”) was brought by each of the respondent mining
companies against the judgment of the Court, specifically on the allegations of
the certification and transmissibility of damages to the estate of a deceased
mineworker.  In June 2016, the Court granted leave to
appeal to the SCA against the transmissibility of damages but refused leave to
appeal in respect of the certification.  The DRDGOLD Respondents (together with each
of the Working Group companies) served a notice of appeal to petition the SCA
against theorder forcertification
and the transmissibility of damages. The SCA granted leave to appeal thereto on
both issues in September 2016.  The appeal to the SCA was set down for
hearing in March 2018 but was subsequently postponed by agreement between the
Applicants and the Respondent companies in light of progress made by the
Working Group described below. The SCA endorsed and upheld the postponement.  The Respondent companies formed a Working
Group consisting of representatives from each company to consider and discuss
issues pertaining to the action. DRDGOLD withdrew from the Working Group in
January 2016.  The remaining members of the Working Group
have all raised accounting provisions during the calendar year 2017 due to
progress made by the Working Group towards a possible settlement with the
Applicants. In May 2018, the remaining members of the Working Group announced
that a mediated settlement agreement had been reached. The agreement is subject
to certain conditions, including the approval by the South African High Court
after which an effective date of the agreement will be set.  DRDGOLD is not a party to the Working Group’s
mediated settlement agreement and maintains the view that it is too early to
consider settlement of the matter, mainly for the following reasons: • the Applicants have as yet not issued and
served a summons (claim) in the matter; • there is no indication of the number of
potential claimants that may join the class action against the DRDGOLD
respondents; • many principles upon which legal
responsibility is founded, are required to be substantially developed by the
trial court (and possibly subsequent courts of appeal) to establish liability
on the bases alleged by the applicants.  In light of the above there is inadequate
information to determine if a sufficient legal and factual basis exists to
establish liability, and to quantify such potential liability.  Theft at our sites,
particularly of copper, may result in greater risks to employees or
interruptions in production.  Crime statistics in South Africa indicate an
increase in theft. This together with price increases for copper has resulted
in theft of copper cable. Our operations experience high incidents of copper
cable theft despite the implementation of security measures. In addition to the
general risk to employees’ lives in an area where theft occurs, we may suffer
production losses and incur additional costs as a result of power interruptions
caused by cable theft and theft of bolts used for the pipeline.  Power stoppages or shortages
or increases in the cost of power could negatively affect our results and
financial condition.  Our mining operations are dependent on
electrical power supplied by Eskom, South Africa’s state-owned utility company.
As a result of insufficient generating capacity, owing to poor maintenance and
lagging capital infrastructure investment, South Africa has faced significant
disruptions in electricity supply in the past and Eskom has warned that the
country could continue to face disruptions in electrical power supply in the
foreseeable future.    1414


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Eskom is currently experiencing financial
difficulties which include,inter alia, the chairman of the board citing
serious concerns around the power utility’s long-term viability and status as a
going concern as disclosed in its 2018 Integrated Report, a decrease in the
demand for its electricity from consumers and its growing outstanding debt owing
from local municipalities, who are both Eskom’s distribution agents and its
largest customer.Accordingly, the security of future power supply as well as the cost thereof, remains a risk and
may have major implications for our operational process, which may result in significant
production losses.  While such power supply disruptions have not
had a material impact on our productionin recent years, the country’s current reserve capacity may
be insufficient and the risk of electricity stoppages is expected to continue
for the foreseeable future. Supply interruptionsbecause of this as
well as an aging and poorly maintained distribution gridmay pose a significant risk to the
operations.  The group has
installed auxiliary emergency units at its plant to prevent the tripping of
thickeners and entered into a five year lease agreement for the supply of
temporary power generation equipment and services during fiscal year 2014 to
drive certain key installations associated with the disposal of tailings.  The group has a load-curtailment agreement in place
with Eskom in terms of which we reduce power consumption by between 10% and 20%
when the grid is under pressure, but Eskom maintains uninterrupted power supply
to the operations. This has enabled us to maintain continuous operations and
very little reduction in volume since its inception.  There is, however, no assurance that the measures
will be sufficient to completely mitigate the risk of power stoppages.  Electricity tariffs increased as follows: from
April 1, 2016 an average tariff increase of 9.4% and from April 1, 2017 an
average tariff increase of 2.2% and from April 1, 2018 an average tariff
increase of 5.2%. These increases have had an adverse effect on our production
costs and similar or higher future increases could have a material adverse
effect on our operating results and financial condition.  Possible scarcity of water maynegatively affect our operations.  South
Africa faces water shortages, which may
lead to the revision of water usage strategies by several sectors in the South
African economy, including electricity generation and municipalities. This may
result in rationing or increased water costs in the future. Such changes would
adversely impact our surface retreatment operations, which use water to
transport the slimes or sand from reclaimed areas to the processing plant and
to the tailings facilities. In addition, as our gold plants and piping
infrastructure were designed to carry certain minimum throughputs, any reductions
in the volumes of available water may require us to adjust production at these
operations.  DRDGOLD invested R22 million in the construction
of a filtration plant at the Rondebult Waste Water Works (operated by the East
Rand Water Care Company) to treat sewage water to reduce the use of potable
water.This water is used both to reclaim and carry production materials
and also, ultimately, to irrigate rehabilitation vegetation at a significantly
lower cost than that of potable water.The plant was commissioned in early fiscal year 2016 and has
capacity to provide Ergo with 10 Mega Litres (“Ml”) a day from the Rondebult
sewage treatment facility. However, due to the deterioration of the local
government authorities’ infrastructure, the expected quantity of sewerage is
not reaching the treatment facility and as a result Ergo is not able to extract
the full design capacity of 10 Ml of water a day. It is not certain if and when
the flow of sewerage will be normalised.  DRDGOLD installed new gland service
infrastructure at the Ergo plant during October 2016 to allow for the use of
recycled process water for gland service requirements. This initiative has
resulted in the reduction of approximately 70Ml a month in potable water use.  The Central Water Facility was commissioned
at a cost of R29.5 million during the last quarter of Fiscal year 2017 to store
and distribute water sourced from Rondebult waste water treatment works,
treated Acid Mine Drainage (“AMD”) water from Trans-Caledon Tunnel Authority
(“TCTA”) and recycled water from our Brakpan/Withok Tailings Deposition
Facility. The Centrally Located Water Facility is a closed circuit and allows
us to distribute water more efficiently throughout the operations.  As part of the Heads of agreement signed
between EMO, Ergo, ERPM and TCTA in December 2012,Ergo secured the right to purchase up to 30Ml of partially treated
AMD from TCTA at cost, in order to reduce Ergo’s reliance on potable water for
mining and processing purposes. AMD water entered our system for the first time
in fiscal year 2017.  There is no assurance that these measures will be
sufficient to alleviate the water scarcity issueswe face.    1515


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Government Regulation  Government policies in South
Africa may adversely impact our operations and profits.  The mining industry in South
Africa is extensively regulated through legislation and regulations issued
through the government’s administrative bodies. These involve directives in
respect of health and safety, the mining and exploration of minerals and
managing the impact of mining operations on the environment. A variety of
permits and authorities are required to mine lawfully, and the government
enforces its regulations through the various government departments.The formulation or implementation of government policies may be
discretionary and unpredictable on certain issues, including changes in
conditions for the issuance of licenses insofar as social and labor plans are
concerned, transformation of the workplace, laws relating to mineral rights,
ownership of mining assets and the rights to prospect and mine, additional
taxes on the mining industry and in extreme cases, nationalization. A change in
regulatory or government policies could adversely affect our business.  Mining royalties and other tax
reform could have an adverse effect on the business, operating results and
financial condition of our operations.  The Mineral and Petroleum Resources Royalty Act,
No.28 of 2008 and the Mineral and Petroleum Resources Royalty Act
(Administration), No.29 of 2008govern royalty rates for gold mining in
South Africa. These acts provide for the payment of a
royalty, calculated through a royalty rate formula (using rates of between 0.5%
and 5.0%) applied against gross revenue per year, payable half yearly with a
third and final payment thereafter. The royalty is tax deductible and the cost
after tax amounts to a rate of between 0.33% and 3.3% at the prevailing
marginal tax rates applicable to the taxed entity. The royalty is payable on
old unconverted mining rights and new converted mining rights. Based on a legal
opinion the Company obtained, mine dumps created before the enactment of theMineral and Petroleum Resources Development Act (“MPRDA”) fall outside the ambit of this royalty and
consequently the Company does not pay any royalty on any dumps created prior to
the MPRDA. Introduction of further revenue based royalties or any adverse
future tax reforms could have an adverse effect on our business, operating
results and financial condition.  Failure to comply with the requirements of the
Broad Based Socio-Economic Empowerment Charter could have an adverse effect on
our business, operating results and financial condition of our operations.  The Broad Based Socio‐Economic Empowerment
Charter for the South African Mining Industry (“Mining Charter”) (effective
from 20014) established certain numerical goals and timeframes to transform
equity participation in the mining industry in South Africa. The goals set by
the Mining Charter include that each mining company must achieve 15% ownership
by historically disadvantaged South Africans, or HDSA, of its South African
mining assets within five years and 26% ownership within ten years, in each
case, from May 1, 2004. This is to be achieved by, among other
methods, the sale of assets to historically disadvantaged persons on a willing
seller/willing buyer basis at market value.  In September 2010, the Department of Mineral
Resources (“DMR”) released amendments to the Mining Charter. The intention
behind the amendments to the Mining Charter was to clarify certain ambiguities
and uncertainties which existed under the Mining Charter and to provide more
specific targets.It was this latter Mining Charter which the DMR applied to
assess compliance with socio-economic transformation objectives. The goals set by the amendments to the
Mining Charter include: minimum 26% HDSA ownership by March 2015; procurement
of a minimum 40% of capital goods, 50% of consumer goods and 70% of services
from Black Economic Empowerment, or BEE, entities by March 2015; minimum 40%
HDSA representation at each of executive management level, senior management
level, middle management level, junior management level and core and critical
skills levels; minimum 3% investment of annual payroll in skills training;
investment in community development; and attaining an occupancy rate of one
person per room in on-site accommodation.  There is now a new Mining Charter in place,
which was gazetted in September 2018, and supersedes all previous iterations
thereof.For detailed discussion, see Item 4B.
Business Overview – Governmental regulations and their effect on our business
–  The Broad Based Socio-Economic Empowerment Charter.  Government policies in South Africa may
adversely impact our operations and profits related to financial provisioning
for rehabilitation.  An amendment to the MPRDA was first proposed in
2013. The amendment bill, if implemented, would have had a material adverse
impact on the Group's estimated financial provisions for environmental
remediation and management due to the proposed inclusion of historic and old
mine dumps in the definition of “residue stockpiles” as well as the extension
of the liability for rehabilitation beyond the issuance of a closure
certificate and the requirement to maintain financial provision for closed
sites for a period of 20 years after a site is closed.The MPRDA Amendment
Bill was withdrawn in August 2018 by the Minister of Mineral Resources, citing,
amongst other things, the adequacy of the current MPRDA to deal with all
regulatory matter pertaining to the mining and petroleum industries.  New Financial Provisioning Regulations (“FPR”) were
published on November 20, 2015 under the National Environmental Management Act,
107 of 1998 (“NEMA”) and became effective from the date of publication thereof.
Proposed amendments to the FPRs were published for public comment GNR 1228 GG
41236 of November 10, 2017 (“Draft Regulations”), which seek to address some
challenges relating to the implementation thereof. Under these FRPs to be
implemented by the DMR, existing environmental rehabilitation trust funds may
only be used for post closure activities and may no longer be utilised for
their intended purpose of concurrent and final rehabilitation and closure.
Further amendments were made to the FPR on September 21, 2018, which extends
the period of compliance with the FPR to February 19, 2020. This is likely to
affect the amount of funds set aside for financial provision for rehabilitation
of the mine.See discussion in 4.B. Business Overview – Governmental
regulations and their effect on our business – Financial Provision for
Rehabilitation. 1616


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The implementation of carbon or other climate
change related taxes might have a direct or indirect negative cost impact on
our operations.  Climate change is a global problem that requires
both a concentrated international response and national efforts to reduce
greenhouse gas, or GHG, emissions. The United Nations Framework Convention on
Climate Change is the main global response to climate change. The associated
Kyoto Protocol is an international agreement that classifies countries by their
level of industrialization and commits certain countries to GHG emission
reduction targets. Although South Africa is not one of these countries
identified, it ranked among the top 20 countries measured by absolute carbon
dioxide emissions. During the 2009 Copenhagen climate change negotiations,
South Africa voluntarily announced that it would act to reduce domestic GHG emissions
by 34% by 2020 and 42% by 2025, subject to the availability of adequate
financial, technological and other support. The two main economic policy
instruments available for setting a price on carbon and curbing GHG emissions
are carbon taxation and emissions trading schemes. In a discussion paper on
carbon taxation by the National Treasury of the South African Government
released in June 2013 different methods of carbon taxation were discussed. The
implementation of these carbon taxes has been postponed pending consideration
by the South African Parliament. Should these taxes be implemented, they might
have a direct or indirect cost impact on our operations which could have an
adverse effect on our business, operating results and financial condition.  Ring-fencing of unredeemed
capital expenditure for South African mining tax purposes could have an adverse
effect on the business, operating results and financial condition of our operations.  The Income Tax Act No 58 of 1962, or the ITA,
contains certain ring-fencing provisions in section 36 specifically relating to
different mines regarding the deduction of certain capital expenditure and the
carry over to subsequent years. After the restructuring of the surface
operations, effective July 1, 2012, Ergo is treated as one taxpaying operation
pursuant to the relevant ring-fencing legislation. It is expected that FWGR
will also be treated as one taxpaying operation pursuant to the relevant
ring-fencing legislation. In the event that we are unsuccessful in confirming
our position or should the South African Receiver of Revenue have a different
interpretation of section 36 of the ITA, it could have an adverse effect on our
business, operating results and financial condition.  Assessment of unredeemed capital expenditure by
the South African Receiver of Revenue could have an adverse effect on the
business, operating results and financial condition of our operations.  Capital expenditure is assessed by the South
African Receiver of Revenue when it is redeemed against taxable mining income
rather than when it is incurred. A different interpretation by the South
African Receiver of Revenue could have an adverse effect on our business,
operating results and financial condition.  Since our South African labor
force has substantial trade union participation, we face the risk of disruption
from labor disputes and new South African labor laws.  Labor costs constituted 19% of our production costs
for fiscal year 2018 (2017: 17% and 2016: 18%). As of June 30, 2018,
our Ergo operations provided full-time employment for 862 employees while our
main service providers deployed an additional 1 426 employees to our
operations, of whom approximately 91% are members of trade unions or employee
associations. We have entered into various agreements regulating wages and
working conditions at our mines. Unreasonable wage demands could increase
production costs to levels where our operations are no longer profitable. This
could lead to accelerated mine closures and labor disruptions. We are also
susceptible to strikes by workers from time to time, which result in
disruptions to our mining operations.  In recent years, labor laws in South Africa have
changed in ways that significantly affect our operations. In particular, laws
that provide for mandatory compensation in the event of termination of
employment for operational reasons and that impose large monetary penalties for
non-compliance with the administrative and reporting requirements of
affirmative action policies could result in significant costs to us. In
addition, future South African legislation and regulations relating to labor
may further increase our costs or alter our relationship with our employees.
Labor cost increases could have an adverse effect on our business, operating
results and financial condition.  Labor unrest could affect production.  During August and September 2012, a number of
illegal strikes at several mining companies in South Africa and events related
to these strikes resulted in 45 people being killed. Between February and June
2014, the platinum industry had a wage strike that lasted for five months. To
bring the strike to an end, above inflation wage increases and changes to
working conditions were agreed to.  We use a third party service provider for the
management of our reclamation sites as well as the Deposition facility at
Brakpan/Withok TDF. Any labor unrest or other significant issue at this third
party service provider may impact the operation of this facility.  Such events at our operations orat our
reclamation sitescould have an
adverse effect on our business, operating results and financial condition.     1717


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Our financial flexibility could be materially
constrained by South African currency restrictions.  South African law provides for exchange control regulations, which
restrict the export of capital from the Common Monetary Area, including South
Africa. The Exchange Control Department of the South African Reserve Bank, or
SARB, is responsible for the administration of exchange control regulations. In
particular, South African companies: ·are generally not permitted to export capital from South Africa or
to hold foreign currency without the approval of the SARB; ·are generally required to repatriate, to South Africa, profits of
foreign operations; and ·are limited in their ability to utilize profits of one foreign
business to finance operations of a different foreign business.  While the South African
Government has relaxed exchange controls in recent years, it is difficult to
predict whether such relaxation of controls will continue in the future. For
further information see Item 10D. Exchange Controls.  We
could be adversely affected by violations of the U.S. Foreign Corrupt Practices
Act and similar anti-bribery laws outside of the United States.  The U.S. Foreign Corrupt Practices Act, or the
FCPA, and similar anti-bribery laws in other jurisdictions generally prohibit companies
and their intermediaries from making improper payments to government officials
or other persons for the purpose of obtaining or retaining business. Recent
years have seen a substantial increase in anti-bribery law enforcement
activity, with more frequent and aggressive investigations and enforcement
proceedings by both the U.S. Department of Justice and the SEC, increased
enforcement activity by non- U.S. regulators, and increases in criminal and
civil proceedings brought against companies and individuals. Our policies
mandate compliance with the FCPA and other applicable anti-bribery laws. Our
internal control policies and procedures may not protect us from reckless or
criminal acts committed by our employees, the employees of any of our
businesses, or third party intermediaries. In the event that we believe or have
reason to believe that our employees or agents have or may have violated
applicable anti-corruption laws, including the FCPA, we would investigate or
have outside counsel investigate the relevant facts and circumstances, which
can be expensive and require significant time and attention from senior
management. Violations of these laws may result in criminal or civil sanctions,
inability to do business with existing or future business partners (either as a
result of express prohibitions or to avoid the appearance of impropriety),
injunctions against future conduct, profit disgorgements, disqualifications
from directly or indirectly engaging in certain types of businesses, the loss of
business permits, reputational harm or other restrictions which could disrupt
our business and have a material adverse effect on our business, financial
condition, results of operations or liquidity.  We face risks with respect to compliance with the
FCPA and similar anti-bribery laws through our acquisition of new companies and
the due diligence we perform in connection with an acquisition may not be
sufficient to enable us fully to assess an acquired company’s historic
compliance with applicable regulations. Furthermore, our post-acquisition
integration efforts may not be adequate to ensure our system of internal
controls and procedures are fully adopted and adhered to by acquired entities,
resulting in increased risks of non-compliance with applicable anti-bribery
laws.  Risks
related to ownership of our ordinary shares or ADSs  It may not be possible for you to effect service of
legal process, enforce judgments of courts outside of South Africa or bring
actions based on securities laws of jurisdictions other than South Africa
against us or against members of our board.  Our Company, certain members of our board of directors and
executive officers are residents of South Africa. All our assets are located
outside the United States and a major portion with respect to the assets of
members of our board of directors and executive officers are either wholly or
substantially located outside the United States. As a result, it may not be
possible for you to effect service of legal process, within the United States
or elsewhere including in South Africa, upon most of our directors or officers,
including matters arising under United States federal securities laws or
applicable United States state securities laws.  Moreover, it may not be possible for you to enforce against us or
the members of our board of directors and executive officers’ judgments
obtained in courts outside South Africa, including the United States, based on
the civil liability provisions of the securities laws of those countries,
including those of the United States.A
foreign judgment is not directly enforceable in South Africa, but constitutes a
cause of action which will be enforced by South African courts provided that:  ·the court which pronounced the judgment had
jurisdiction to entertain the case according to the principles recognized by
South African law with reference to the jurisdiction of foreign courts; ·the judgment is final and conclusive (that
is, it cannot be altered by the court which pronounced it); ·the judgment has not lapsed; ·the recognition and enforcement of the
judgment by South African courts would not be contrary to public policy,
including observance of the rules of natural justice which require that no
award is enforceable unless the defendant was duly served with documents
initiating proceedings, that he was given a fair opportunity to be heard and
that he enjoyed the right to be legally represented in a free and fair trial
before an impartial tribunal; ·the judgment was not obtained by fraudulent
means; ·the judgment does not involve the enforcement
of a penal or revenue law; and ·the enforcement of the judgment is not
otherwise precluded by the provisions of the Protection of Business Act, 1978
(as amended), of South Africa.  It is the policy of South African courts to award
compensation for the loss or damage sustained by the person to whom the
compensation is awarded. Although the award of punitive damages is generally
unknown to the South African legal system that does not mean that such awards 1818


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are necessarily contrary to public policy. Whether a
judgment was contrary to public policy depends on the facts of each case.
Exorbitant, unconscionable, or excessive awards will generally be contrary to
public policy. South African courts cannot enter into the merits of a foreign
judgment and cannot act as a court of appeal or review over the foreign court.
South African courts will usually implement their own procedural laws and,
where an action based on an international contract is brought before a South
African court, the capacity of the parties to the contract will usually be
determined in accordance with South African law.  It is doubtful whether an original action based on
United States federal securities laws may be brought before South African
courts. A plaintiff who is not resident in South Africa may be required to
provide security for costs in the event of proceedings being initiated in South
Africa. Furthermore, the Rules of the High Court of South Africa require that
documents executed outside South Africa must be authenticated for use in South
African courts.It may not be possible therefore for an
investor to seek to impose liability on us in a South African court arising
from a violation of United States federal securities laws.  Dividend withholding tax will reduce the amount of dividends
received by beneficial owners.  On April 1, 2012, the South African
Government replaced Secondary Tax on Companies (then 10%) with a 15% withholding
tax on dividends and other distributions payable to shareholders. The dividend
withholding tax rate was increased to 20%, effective from February 22, 2017. 
The withholding tax reduces the amount of dividends or other distributions
received by our shareholders. Any further increases in such tax will further
reduce net dividends received by our shareholders.  Your rights as a shareholder are governed by South African law,
which differs in material respects from the rights of shareholders under the
laws of other jurisdictions.  Our Company is a public limited liability company incorporated
under the laws of the Republic of South Africa. The rights of holders of our
ordinary shares, and therefore many of the rights of our ADS holders, are
governed by our memorandum of incorporation and by South African law. These
rights differ in material respects from the rights of shareholders in companies
incorporated elsewhere, such as in the United States. In particular, South
African law significantly limits the circumstances under which shareholders of
South African companies may institute litigation on behalf of a company.  Control by principal shareholders could adversely affect our other
shareholders.  On July 31, 2018, 265 million ordinary shares were issued to
Sibanye-Stillwater as settlement of the purchase consideration for the
acquisition of the WRTRP Assets. As part of this acquisition,
Sibanye-Stillwater was granted an option to subscribe for further shares to
achieve a 50.1% shareholding at a 10% discount to the prevailing market value
for a period of 2 years from the effective date of the acquisition. As a
result, Sibanye-Stillwater currently beneficially owns approximately 38.05% of
our outstanding ordinary shares and voting power and this may increase to
50.1%. Sibanye-Stillwater therefore has the ability to control, or exert a
significant influence over, our board of directors, and will continue to have significant
influence over our affairs for the foreseeable future, including with respect
to the election of directors, the consummation of significant corporate
transactions, such as an amendment of our constitution, a  merger or other sale
of our company or our assets, and all matters requiring shareholder approval.
In certain circumstances, Sibanye-Stillwater’s interests as a principal
shareholder may conflict with the interests of our other shareholders and
Sibanye-Stillwater’s ability to exercise control, or exert significant
influence, over us may have the effect of causing, delaying, or preventing
changes or transactions that our other shareholders may or may not deem to be
in their best interests. In addition, any sale or expected sale of some or all the
shares held by Sibanye-Stillwater could have an adverse impact on our stock
price.  Sales of large volumes of our ordinary shares or ADSs or the
perception that these sales may occur, could adversely affect the prevailing
market price of such securities.  The market price of our ordinary shares or ADSs could fall if
substantial amounts of ordinary shares or ADSs are sold by our stockholders, or
there is the perception in the marketplace that such sales could occur. Current
holders of our ordinary shares or ADSs may decide to sell them at any time.
Sales of our ordinary shares or ADSs, if substantial, or the perception that
any such substantial sales may occur, could exert downward pressure on the
prevailing market prices for our ordinary shares or ADSs, causing their market
prices to decline. Trading activity of hedge funds and the ability to borrow
script in the market place will increase trading volumes and may place our
share price under pressure. 1919


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ITEM
4. INFORMATION ON THE COMPANY  4A. HISTORY AND
DEVELOPMENT OF THE COMPANY  Introduction  DRDGOLD Limited, or DRDGOLD, is a South African
domiciled company that holds assets engaged in surface gold tailings
retreatment in South Africa including exploration, extraction, processing and
smelting.  We are a public limited liability company,
incorporated on February 16, 1895, as Durban Roodepoort Deep, Limited. On
December 3, 2004, the company changed its name from Durban Roodepoort Deep
Limited to DRDGOLD Limited. Our operations have focused on South Africa's West
Witwatersrand Basin, which has been a gold producing region for over
120 years.  Our shares and/or related instruments trade on the
JSE, New York Stock Exchange, the Over The Counter, or OTC, market in Berlin
and Stuttgart and the Regulated Unofficial Market on the Frankfurt Stock
Exchange. The Company’s shares were delisted from the Marché Libre Paris
effective May 30, 2018.  Our registered office and business address is 1
Sixty Jan Smuts Building, 2nd Floor - North Tower, 160 Jan Smuts Avenue,
Rosebank, 2196, South Africa. The postal address is P.O. Box 390,
Maraisburg, 1700, South Africa. Our telephone number is
(+27 11) 470-2600 and our facsimile number is (+2786) 524-3061. We are
registered under the South African Companies Act 71, 2008 under registration
number 1895/000926/06. For our ADSs, the Bank of New York Mellon, at 101
Barclay Street, New York, NY 10286, United States, has been appointed as agent.  All of our operations are conducted in South
Africa.  Our
operations primarily consist of Ergo. It also includes the historic Crown operations
(which were restructured into Ergo during fiscal year 2012 and have
substantially been rehabilitated as at the end of fiscal year 2018) as well as ERPM
which is currently under care and maintenance.  On July 31, 2018, we completed the
acquisition of certain gold surface processing assets and tailing storage
facilities that include Driefontein 3 and 5, Kloof 1, Venterspost North and
South, Libanon, Driefontein 4, Driefontein 2 plant, Driefontein 3 plant, WRTRP
pilot plant, and land required for the future development of a central
processing plant, regional tailings storage facility and return water dam
(together, the “WRTRP Assets”) associated with Sibanye-Stillwater’s WRTRP, to
be known going forward as FWGR.  This acquisition represents a significant
increase in our assets, which will impact our results in future years.  In
connection with the acquisition, we issued to Sibanye-Stillwater new shares
equal to 38.05% of outstanding shares and granted Sibanye-Stillwater an option
to acquire up to a total of 50.1% of our sharesfor a period of 2 years from the effective date of the acquisition
at a 10% discount to the prevailing market value. For more information regarding this acquisition please see our
Form 6-K, dated November 22, 2017 "Proposed Transaction to acquire the
WRTRP assets from Sibanye-Stillwater, waiver of mandatory offer and cautionary announcement",
incorporated by reference herein and Item 10C. Material Contracts.  For a detailed description of the
assets acquiredsee
Item 4D. Property, Plant and Equipment.  Ergo  Ergo was formed in June 2007.Ergo is the surface tailings retreatment operation consisting of what
was historically the Crown Gold Recoveries Proprietary Limited (Crown), East
Rand Proprietary Mines Limited's (ERPM) Cason Dump operation and the ErgoGold
business units which are now collectively referred to as Ergo.On July 1, 2012, Ergo acquired the mining assets
and certain liabilities of Crown and all the surface assets and liabilities of
ERPM as part of the restructuring of our surface operations. Also as part of
this restructuring, Ergo acquired DRDGOLD's 35% interest in ErgoGold.  The flotation and fine-grind project, commissioned
during fiscal year 2014, is designed to improve extraction efficiencies which
are derived from the separation of gold contained within the sulfides of the
tailings material by subjecting the treated material to a flotation circuit,
further regrinding and a leach circuit.  The refurbishment of the remaining five
carbon-in-leach tanks was completed during September 2015 to increase volume
capacity by approximately 0.3Mtpm to a total of 2.1Mtpm.  Capital expenditure is mainly financed through cash
resources and operational cash flows while financing for significant growth
projects may be obtained through specific financing arrangements if required.    2020


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Brakpan/Withok TDF expansion Ergo has the
technology to fine-grind gold-bearing material to achieve recovery efficiencies
previously outside the reach of typical metallurgical processing. Although we
pump processing material from as far as 60km away, most of our tailings mine
residue recovery sites are based in the vicinity of Ergo, including our surface
and pipeline infrastructure. This is a key focus of DRDGOLD’s operations. We have
typically processed 1.8Mt of material through the Ergo plant every month. In
order to extend the life of our Ergo operation, it is necessary to increase
residue tailings deposition capacity at our Brakpan/Withok TDF. A legal review of the
existing authorizations was undertaken for increasing the deposition capacity
of the Brakpan/Withok TDF. The results indicated that most of the current
authorizations are sufficient, however certain documentation would need to be
amended.We
expect thiscould increase the potential deposition capacity by approximately
800Mt, and thus, our life of mine from 12 years to more than 20 years.For further information on other
capital investments, divestures, capital expenditure and capital commitments,
see Item 4D. Property, Plant and Equipment, and Item 5B. Liquidity and Capital
Resources.  ERPM  ERPM, which consists of an underground mine which
has been under care and maintenance since fiscal year 2009, and ERPM Extension
1 and 2 exploration tenements, were acquired in October, 2002. Underground
mining at ERPM was halted in October 2008. On July 1, 2012, ERPM sold its
surface mining assets and its 65% interest in ErgoGold to Ergo in exchange for
shares in Ergo as part of the restructuring of our surface operations. In line with the Group’s strategy to exit underground mining
operations, ERPM entered into an agreement to sell certain of the underground
mining and prospecting rights held by ERPM including the related liabilities
during the financial year ended 30 June 2014 subject to conditions, including
regulatory approvals. The lastoutstanding
regulatory approval, being the approval under Section 11 of the Mineral and
Petroleum Resource Development Act was not fulfilled by the purchaser.
Management decided not to provide any further extension to the purchaser and
accordingly the agreement in respect of the disposal of these underground
mining and prospecting rights, including the related liabilities, lapsed. The R2 million breakage
fee, equal to the transaction costs incurred, plus R0.8 million interest
accrued thereon was paid to ERPM on September 5, 2018. Crown  Crown wasacquired on September 14, 1998. Crown exploited various surface sources, including
sand and slime tailings deposited as part of previous mining operations. On
July 1, 2012, Crown sold its mining assets, mining and prospecting rights and
certain liabilities to Ergo in exchange for shares in Ergo as part of the
restructuring of our surface operations. Due to the depletion of ore reserves
in the western Witwatersrand, we took the decision at the end of fiscal year
2016 that in fiscal year 2017 we would complete the recovery of material from a
number of Crown reclamation sites and to close the Crown plant. This plant
operated as a pump/milling station feeding the metallurgical plants until March
2017 when it ceased all operations.  4B. BUSINESS OVERVIEW  We are a South African companythat holds assets engaged in surface gold
tailings retreatment including exploration, extraction, processing and smelting. Our surface tailings retreatment operations,
including the requisite infrastructure and metallurgical processing plants, are
located in South Africa. Our operating footprint is unique in that it involves
some of the largest concentration of gold tailings deposits in the world,
situated within the city boundaries of Johannesburg and its suburbs.  The success of DRDGOLD’s long-term goal to extract as
much gold as possible from its assets depends, to a large extent, on how
effectively it continues to manage its capitals. DRDGOLD uses sustainable development
to direct its strategic thinking. We seek sustainable benefits in respect to
financial, manufactured, natural, social and human capitals, each of which is
essential to our operations.  We also aim to align and overlap the interests of
each of these capitals in such a manner that an investment in any one
translates into value-added increases in as many of the others as possible. We
therefore seek to achieve an enduring and harmonious alignment between them,
and we pursue these criteria in the feasibility analysis of each investment.
The board intends to explore the opportunities made possible by technology,
which means further investment in research and development (“R&D”) to
improve gold recoveries even further over the long term.  On July 31, 2018, we completed the
acquisition of the gold assets associated with Sibanye-Stillwater’s WRTRP, to
be known going forward as FWGR.  This acquisition represents a significant
increase in our assets.  During the fiscal years presented in this Annual
Report, all of our operations took place in one geographic region, namely South
Africa.    2121


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Description of Our
Mining Business  Surface tailings retreatment  Surface tailings retreatment involves the
extraction of gold from old mine dumps,comprising
the waste material from earlier underground gold mining activities. This is done
by reprocessing sand dumps and slimes dams along the reefs that stretch from
east to west just to the south of Johannesburg’s central business district
(CBD). Sand dumps are the result of the less efficient stamp-milling process
employed in earlier times. They consist of coarse-grained particles which
generally contain higher quantities of gold. Sand dumps are reclaimed
mechanically using front end loaders that load sand onto conveyor belts. The
sand is fed onto a screen where water is added to wash the sand into a sump,
from where it is pumped to the plant. Most sand dumps have already been
retreated using more efficient milling methods. Lower grade slimes dams were
the product of the “tube and ball mill” recovery process. This material has
become economically more viable to process owing to improved treatment methods.
The material from the slimes dams is broken down using monitor guns that spray
jets of high pressure water at the target area. The resulting slurry is then
pumped to a treatment plant for processing.  Exploration  Exploration activities are
focused on the extension of existing ore reserves and identification of new ore
reserves both at existing sites and at undeveloped sites. Once a potential site
has been identified, exploration is extended and intensified in order to enable
clearer definition of the site and the portions with the potential to be mined.
Geological techniques are constantly refined to improve the economic viability
of exploration and exploitation.  Our Metallurgical Plants and Processes  A detailed review of the metallurgical plants and
processes is provided under Item 4D. Property, Plant and Equipment.  Gold Market  The gold market is relatively liquid compared to
other commodity markets, with the price of gold quoted in dollars. Physical
demand for gold is primarily for manufacturing purposes, and gold is traded on
a world-wide basis. Refined gold has a variety of uses, including jewelry,
electronics, dentistry, decorations, medals and official coins. In addition,
central banks, financial institutions and private individuals buy, sell and
hold gold bullion as an investment and as a store of value (due to the tendency
of gold to retain its value in relative terms against basic goods and in times
of inflation and monetary crises).  The use of gold as a store of value and the
large quantities of gold held for this purpose in relation to annual mine
production have meant that historically the potential total supply of gold has
been far greater than demand. Thus, while current supply and demand play some
part in determining the price of gold, this does not occur to the same extent
as in the case of other commodities. Instead, the gold price has from time to
time been significantly affected by macro-economic factors such as expectations
of inflation, interest rates, exchange rates, changes in reserve policy by
central banks and global or regional political and economic crises. In times of
inflation and currency devaluation gold is often seen as a safe haven, leading
to increased purchases of gold and support for its price.  The average gold spot price increased by 3%
from $1 257 per ounce to $1 297 per ounceduring fiscal year
2018after having increased by 8% from $1 167per ounceto$1 257per ounceduring the fiscal
year2017 and having decreased by 5% from $1 224per ounceto$1 167per ounceduring the fiscal
year2016. The average gold price received by us
for fiscal year 2018 decreased by 3% to R534 344 per kilogram compared to
the previous year at R548 268 per kilogram.  Looking ahead we believe that the global
economic environment, including escalating sovereign and personal levels of
debt, economic volatility and the oversupply of foreign currency, will again
make gold attractive to investors. The supply of gold has shrunk and is likely
to shrink even more due to the significantly reduced capital expenditure and
development occurring in the sector.  We believe that this, coupled with global
economic uncertainty, is likely to provide significant support to the gold
price in the long term.  All of our revenue is generated in South Africa. Our total revenue
for year ended June 30, 2018 amounted to R2 490.4 million (2017: R2 339.9
million and 2016: R2 433.1 million).  All gold we produce is sold on our behalf by Rand
Refinery Proprietary Limited (Rand Refinery) in accordance with a refining
agreement entered into in October 2001 and updated in July 2018. The gold
bars which we produce consist of approximately 85% gold, 7-8% silver and the
balance comprises copper and other common elements. The gold bars are sent to Rand
Refinery for assaying and final refining where the gold is purified to 99.9%
and cast into troy ounce bars of varying weights. Rand Refinery then sells the
gold on the same day as delivery, for the London afternoon fixed dollar price,
with the dollar proceeds remitted to us within two days. In exchange for this
service we pay Rand Refinery a variable refining fee plus fixed marketing, loan
and administration fees. We own 11% (fiscal year2017and2016:
11%) of Rand Refinery.    2222


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Ore Reserves  Ore Reserve estimates in this Annual Report are reported in
accordance with the requirements of the SEC’s Industry Guide 7. Accordingly, as
of the date of reporting, all ore reserves are planned to be mined under the
life of mine plan within the period of our existing rights to mine, or within
the time period of assured renewal periods of our rights to mine. In addition,
as of the date of this report, all ore reserves are covered by required permits
and governmental approvals. See Item 4D. Property, Plant and Equipment for a
description of the rights in relation to each mine.  In South Africa, we are legally required to publicly report Ore
Reserves and Mineral Resources in compliance with the South African Code for
the Reporting of Exploration Results, Mineral Resources and Mineral Reserves,
or SAMREC Code. The SEC’s Industry Guide 7 does not recognize Mineral
Resources. Accordingly, we do not include estimates of Mineral Resources in
this Annual Report.  Ore Reserve calculations are subject to a review conducted in
accordance with SEC Industry Guide 7.Ore
Reserve tons, grade and content are quoted as delivered to the gold plant.
There are two types of methods available to select ore for mining. The first is
pay-limit, which includes cash operating costs, including overhead costs, to
calculate the pay-limit grade. The second is the cut-off grade which includes
cash operating costs, excluding fixed overhead costs, to calculate the cut-off
grade, resulting in a lower figure than the full pay-limit grade. The cut-off
grade is based upon direct costs from the mining plan, taking into consideration
production levels, production efficiencies and the expected costs. We use the
pay-limit to determine which areas to mine as an overhead inclusive amount that
is indicative of the break-even position.  The pay-limit approach is based on the minimum
in-situ grade of reclamation sites, for which the production costs, which
includes all overhead costs, including head office charges, are equal to a
three-year historical average gold price per ounce for that year. This
calculation also considers the previous three years’ mining and milling
efficiencies, which includes metallurgical and other mining factors and the
production plan for the next twelve months. Only areas above the pay-limit
grade are considered for mining. The pay-limit grade is higher than the cut-off
grade, because this includes overhead costs, which indicates the break-even
position of the operation.  When delineating the economic limits to the ore
bodies, we adhere to the following guidelines: ·The potential ore to be mined is well defined
by an externally verified and approved geological model; ·The potential ore, which is legally allowed
to be mined, is also confined by the mine's lease boundaries; and ·A business plan is prepared to mine the
potential ore.  Our Ore Reserves figures are estimates, which may
not reflect actual ore reserves or future production. These figures are
prepared in accordance with industry practice, converting mineral deposits to
an Ore Reserve through the preparation of a mining plan. The Ore Reserve
estimates contained herein inherently include a degree of uncertainty and
depend to some extent on statistical inferences. Ore reserve estimates require
revisions based on actual production experience or new information. Should we
encounter mineralization or formations different from those predicted by past
drilling, sampling and similar examinations, ore reserve estimates may have to
be adjusted and mining plans may have to be altered in a way that might
adversely affect our operations. Moreover, if the price of gold declines, or
stabilizes at a price that is lower than recent levels, or if our production
costs increase or recovery rates decrease, it may become uneconomical to
recover Ore Reserves containing relatively lower grades of mineralization.  Our
Ore Reserves are prepared using three year average rand gold prices. We prepare
business plans using the forecast rand gold price at the time of the ore
reserve determination.  Gold prices and exchange rates used for Ore Reserves and for our
business plan are outlined in the following table.  2018
 2017
 2016Three-year average
 Prevailing gold price
 Three-year average gold price
 Prevailing gold price
 Three-year average gold price
 Prevailing gold priceReserve gold price –$/oz
 1 240
 1 328
 1,216
 1,280
 1,228
 1,293Reserve gold price –R/kg
 543 327
 550 411
 514,785
 565,000
 475,268
 591,697Exchange rate –R/$
 13.63
 12.90
 13.17
 13.73
 12.03
 14.23
 Our Ore Reserves (imperial) increased from 2.99 million ounces at June
30, 2017, to 3.28 million ounces at June 30, 2018,mainly
because of a drilling program and pre-feasibility study (“PFS”) that commenced
during September 2016 and continued into fiscal year 2018, aimed at
re-evaluating our surface gold tailings, and specifically due to drilling
performed on the Rooikraal tailings deposition facility in fiscal 2018. The
increase was offset by depletion through ongoing mining activities.The life of mine for Ergo based on proven and probable ore
reserves under Industry Guide 7 of the SEC as at June 30, 2018, was 12 years
and the life of mine as at June 30, 2017, 12 years.   2323


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DRDGOLD's Ore Reserves as of
  June 30, 2018 and 2017 are set forth in the tables below.Ore
  Reserves: ImperialAt June 30, 2018
 At June 30, 2017Proven Ore Reserves
 Probable Ore Reserves
 Proven Ore Reserves
 Probable Ore ReservesTons
 Grade
 Gold Content
 Tons
 Grade
 Gold Content
 Tons
 Grade
 Gold Content
 Tons
 Grade
 Gold Content(mill)
 (oz/ton)
 ('000 ozs)
 (mill)
 (oz/ton)
 ('000 ozs)
 (mill)
 (oz/ton)
 ('000 ozs)
 (mill)
 (oz/ton)
 ('000 ozs)Ergo1Surface
 74.988
 0.01
 663
 291 198
 0.01
 2 617
 99.691
 0.01
 881
 230.136
 0.01
 2 110Total1
 74.988
 0.01
 663
 291 198
 0.01
 2 617
 99.691
 0.01
 881
 230.136
 0.01
 2 110Ore
  reserves: MetricAt June 30, 2018
 At June 30, 2017Proven Ore Reserves
 Probable Ore Reserves
 Proven Ore Reserves
 Probable Ore ReservesTonnes
 Grade
 Gold Content
 Tonnes
 Grade
 Gold Content
 Tonnes
 Grade
 Gold Content
 Tonnes
 Grade
 Gold Content(mill)
 (g/tonne)
 (tonnes)
 (mill)
 (g/tonne)
 (tonnes)
 (mill)
 (g/tonne)
 (tonnes)
 (mill)
 (g/tonne)
 (tonnes)Ergo1Surface
 68.03
 0.303
 20.590
 264.17
 0.308
 81.300
 90.44
 0.303
 27.414
 208.782
 0.314
 65.621Total1
 68.03
 0.303
 20.590
 264.17
 0.308
 81.300
 90.44
 0.303
 27.414
 208.782
 0.314
 65.6211The Ore Reserves listed in the above
  table are estimates of what can be legally and economically recovered from
  operations, and, as stated, are estimates of tons delivered to the plant.
  24


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The
measurement and classification of our Proven and Probable Ore Reserves are
sensitive to an extent to the fluctuation of the rand gold price. If we had
used different rand gold prices than the three-year average prices at the time
of ore reserve determination, as of June 30, 2018 and 2017 respectively, we
would not have had significantly different ore reserves as of those dates.
Using the same methodology and assumptions as were used to estimate Ore
Reserves but with different rand gold prices as detailed below, our Ore
Reserves as of June 30, 2018 and 2017 would be as follows:  Year ended June 30, 2018
 Three-year average gold price
 Prevailing price
 10% Below prevailing price
 10% Above prevailing priceRand gold price per kilogram
 543 527
 550 411
 495 370
 605 452Dollar gold price per ounce
 1 240
 1 328
 1 195
 1 461Ore Reserves (million ounces)
 3.28
 3.28
 3.28
 3.28Year ended June 30, 2017
 Three-year average gold price
 Prevailing price
 10% Below prevailing price
 10% Above prevailing priceRand gold price per kilogram
 514 785
 565 000
 508 500
 621 500Dollar gold price per ounce
 1 216
 1 280
 1 152
 1 408Ore Reserves (million ounces)
 3.0
 3.0
 2.9
 3.0
 The
  approximate mining recovery factors for the 2018 ore reserves shown in the
  above table are as follows:MetallurgicalMine Call Factor
 recovery factory(%)
 (%)Ergo
 
 
 100
 48The
  approximate mining recovery factors for the 2017 ore reserves shown in the above
  table are as follows:MetallurgicalMine Call Factor
 recovery factory(%)
 (%)Ergo
 
 
 95
 47.4
 The
  following table shows the average drill/sample spacing (rounded to the
  nearest foot), as at June 30, 2018 and 2017, foreach
  category of Ore Reserves at our mines calculated based on a three year
  average dollar price of gold.Proven
 ProbableReserves
 ReservesErgo
 
 328 ft. by 328 ft.
 328 ft. by 328 ft.
  The
  pay-limit grades based on the three year average dollar price for gold
  amounting to R543,527 and costs used to determinereserves
  as of June 30, 2018, are as follows:Costs used to determine pay-Pay-limit grade (g/t)
 limit grade (R/t)Ergo
 
 0.224
 58.41The
  pay-limit grades based on the three year average dollar price for gold
  amounting to R514,785 and costs used to determinereserves
  as of June 30, 2017, are as follows:Costs used to determine pay-Ergo
 
 Pay-limit grade (g/t)
 limit grade (R/t)0.284
 65.95We
  apply the pay-limit approach to the mineralized material database of our
  business in order to determine the tonnage andgrade
  available for mining.
 25


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Governmental regulations and their effects on
our business  Common Law Mineral Rights and Statutory
Mining Rights  Prior to the introduction of
the Minerals and Petroleum Resources Development Act, or MPRDA in 2002,
ownership in mineral rights in South Africa could be acquired through the common
law or by statute. With effect from May 1, 2004, all minerals have been placed
under the custodianship of the South African government under the provisions of
the MPRDA and old order proprietary rights were required to be converted to new
order rights of use within certain prescribed periods, as dealt with in more
detail below.  Conversion of Rights under the Mineral and Petroleum Resources
Development Act, 2002  Existing old order rights were required to be
converted into new order rights in order to ensure exclusive access to the
mineral for which rights existed at the time of the enactment of the MPRDA. In
respect of used old order mining rights, the DMR is obliged to convert the
rights if the applicant complies with certain statutory criteria. These include
the submission of a mining works program, demonstrable technical and financial
capability to give effect to the program, provision for environmental
management and rehabilitation, and compliance with certain black economic
empowerment criteria and a social and labor plan. These applications had to be
submitted within five years after the promulgation of the MPRDA on
May 1, 2004. Similar procedures apply where we hold prospecting
rights and a prospecting permit and conduct prospecting operations. Under the
MPRDA mining rights are not perpetual, but endure for a fixed period, namely a
maximum period of thirty years, after which they may be renewed for a further
period of thirty years. Prospecting rights are limited to five years, with one
further period of renewal of three years. Applications for conversion of our
old order rights were submitted to the DMR within the requisite time periods.
As at September 30, 2018, all of our Ergo operation’s old order mining rights
have been converted into new order rights under the terms of the MPRDA.  The Broad Based Socio-Economic Empowerment Charter  In order to promote broad based participation in
mining revenue, the MPRDA provides for a Mining Charter to be developed by the
Minister within six months of commencement of the MPRDA beginning May 1, 2004.
The Mining Charter was initially published in August 2004 and was subsequently
amended in September 2010. Its objectives include:  ·increased direct and indirect ownership of
mining entities by qualifying parties as defined in the Mining Charter; ·expansion of opportunities for persons
disadvantaged by unfair discrimination under the previous political
dispensation; ·expansion of the skills base of such persons,
the promotion of employment and advancement of the social and economic welfare
of mining communities; and ·promotion of beneficiation.  The Mining Charter sets certain goals on
equity participation (amount of equity participation and time frames) by
historically disadvantaged South Africans of South African mining assets. It
recommends that these are achieved by, among other methods, disposal of assets
by mining companies to historically disadvantaged persons on a willing seller,
willing buyer basis at fair market value. The goals set by the Mining Charter
require each mining company to achieve 15 percent ownership by
historically disadvantaged South Africans of its South African mining assets
within five years and 26 percent ownership by May 1, 2014. It also sets
out guidelines and goals in respect of employment equity at management level
with a view to achieving 40 percent participation by historically
disadvantaged persons in management and ten percent participation by women in
the mining industry, each within five years from May 1, 2004. Compliance with
these objectives is measured on the weighted average “scorecard” approach in
accordance with a scorecard which was first published around August 2010.  The Mining Charter and the related scorecard are
not legally binding and, instead, simply state a public policy. However, the
DMR places significant emphasis on the compliance therewith. The Mining Charter
and scorecard, have a decisive effect on administrative action taken under the
MPRDA.  Inrecognition of the Mining Charter’s objectives of transforming the
mining industry by increasing the number of black people in the industry to
reflect the country’s population demographics, to empower and enable them to
meaningfully participate in and sustain the growth of the economy, thereby
advancing equal opportunity and equitable income distribution, wehave achieved our commitment to ownership
compliance with the MPRDA through our existing black economic empowerment
structure with Khumo Gold and the DRDSA Empowerment Trust. Our black economic
empowerment partners, Khumo Gold and the DRDSA Empowerment Trust, hold 4% and
2%, respectively, in DRDGOLD Limited. (See Item 4C. Organizational Structure).  The mining industry in South Africa is extensively
regulated through legislation and regulations issued by government’s
administrative bodies. These involve directives with respect to health and
safety, mining and exploration of minerals, and managing the impact of mining
operations on the environment. A change in regulatory or government policies
could adversely affect our business.  On September 27, 2018 the Broad-Based
Socio-Economic Empowerment Charter for the Mining and Minerals Industry, 2018
(“Mining Charter 2018”) was published in Government Gazette No. 41934 of
Government Notice No. 639 on September 27, 2018 superseding and replacing all
previous charters, including the Reviewed Broad-Based Black Economic
Empowerment Charter for the South African Mining and Minerals Industry, 2016
(“Mining Charter III”).     2626


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Mining Charter 2018 requires
an enduring 30% BEE interest in respect of new mining rights. It also has
extensive provisions in respect of HDP representation at board and management,
as well provisions relating to local procurement of goods and services. The
procurement target of the total spend on services from South African companies
has been pegged at 80% (up from 70% in Mining Charter III) and 60% of the
aggregate spend thereof must be apportioned to BEE entrepreneurs.  Key provisions of Mining Charter 2018, which are
welcomed by the industry are: •              The conditional acceptance of
the continued consequences of previous compliance of the BEE ownership
threshold of 26% in respect of existing mining rights; •              Of the 30% HDP ownership
component, qualifying employees and communities are each to hold a 5% carried
interest (as opposed to a free carry interest as per Mining Charter III)  the
cost of which may be recovered by the mining right holder from the development
of the asset. The community interest in turn may be offset by way of an equity
equivalent; •              Removal of the so-called 1% of EBITDA trickle
dividend provided for in Mining Charter III; and •              The removal of provisions requiring community and
employee representation at board level.  Elements of Mining Charter 2018 which we consider unfortunate, and
which will be the topic of ongoing discussion with the DMR,  are: •              that the continuing consequences of HDP ownership
are not recognized for transfers of mining rights; and •              that a top up of HDP ownership back to 30% is
required for the renewal of existing rights.  DRDGOLD is a member for the Minerals Council who
has noted a material improvement on Mining Charter 2018, but still expresses
concern on its ability to promote growth and attract investment.  The Minerals Council provided, on behalf of its
members, its preliminary response on October 3, 2018 and welcomed the
publication of the Mining Charter and indirectly that it broadly supports its
purpose and content. The Minerals Council noted that the Mining Charter is the
product of substantial engagement between key stakeholders and is a compromise
that reflects different difficult choices that have been made. This Mining
Charter provides a better balance between the mutually reinforcing concepts of
promoting competitiveness and transformation.  Mine Health and Safety Regulation  The South African Mine Health and Safety Act, 1996
(as amended), or the Mine Health and Safety Act, came into effect in
January 1997. The principal object of the Mine Health and Safety Act is to
improve health and safety at South African mines and, to this end, imposes
various duties on us at our mines and grants the authorities broad powers to,
among other things, close unsafe mines and order corrective action relating to
healthand safety matters. In the event of any future accidents at any of
our mines, regulatory authorities could take steps which could increase our
costs and/or reduce our production capacity. TheAct was amended in2009 and
the amendments to the Act dealt withinter aliathe stoppage of
production and increase punitive measures including increased financial fines
and legal liability of mine management. Some of the more important new
provisions in the 2009 amendment bill are the insertion of a new section 50(7A)
that obliges an inspector to impose a prohibition on the further functioning of
a site where a person’s death, serious injury or illness to a person or a
health threatening occurrence has occurred; a new section 86A(1) creating a new
offence for any person who contravenes or fails to comply with the provisions
of the Mine Health and Safety Act thereby causing a person’s death or serious
injury or illness to a person. Subsection (3) further provides that (a) the
“fact that the person issued instructions prohibiting the performance or an
omission is not in itself sufficient proof that all reasonable steps were taken
to prevent the performance or omission”; and that (b) “the defense of ignorance
or mistake by any person accused cannot be permitted”; or that (c) “the defense
that the death of a person, injury, illness or endangerment was caused by the
performance or an omission of any individual within the employ of the employer
may not be admitted”; a new section 86A(2) creating an offence of vicarious
liability for the employer where a Chief Executive Officer, manager, agent or
employee of the employer committed an offence and the employer either connived
at or permitted the performance or an omission by the Chief Executive Officer,
manager, agent or employee concerned; or did not take all reasonable steps to
prevent the performance or an omission. The maximum fines have also been
increased. Any owner convicted in terms of section 86 or 86A may be sentenced
to “withdrawal or suspension of the permit” or to a fine of R3 million or a
period of imprisonment not exceeding five years or to both such fine and
imprisonment, while the maximum fine for other offences and for administrative
fines have all been increased, with the highest being R1 million.  Under the South African Compensation for
Occupational Injuries and Diseases Act, 1993 (as amended), or COID Act,
employers are required to contribute to a fund specifically created for the
purpose of compensating employees or their dependents for disability or death
arising in the course of their work. Employees who are incapacitated in the
course of their work have no claim for compensation directly from the employer
and must claim compensation from the COID Act fund. Employees are entitled to
compensation without having to prove that the injury or disease was caused by
negligence on the part of the employer, although if negligence is involved,
increased compensation may be payable by this fund. The COID Act relieves
employers of the prospect of costly damages, but does not relieve employers
from liability for negligent acts caused to third parties outside the scope of
employment. In fiscal year 2018, we contributed approximately R3.7 million
under the COID Act (2017: R3.6 million and 2016: R3.4 million) to a
multi-employer industry fund administered by Rand Mutual Assurance Limited.  Under the Occupational Diseases in Mines and Works
Act, 1973 (as amended), or the Occupational Diseases Act, the multi-employer
fund pays compensation to employees of mines performing “risk work,” usually in
circumstances where the employee is exposed to dust, gases, vapors, chemical
substances or other working conditions which are potentially harmful, or if the
employee contracts a “compensatable disease,” which includes pneumoconiosis,
tuberculosis, or a permanent obstruction of the airways. No employee is
entitled to benefits under the Occupational Diseases Act for any disease for
which compensation has been received or is still to be received under the COID
Act. These payment requirements are based on a combination of the employee
costs and claims made during the fiscal year.     2727


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Uranium and radon are often
encountered during the ordinary course of gold mining operations in South
Africa, and present potential risks for radiation exposure of workers at those
operations and the public to radiation in the nearby vicinity. We monitor our
uranium and radon emissions for compliance with all local laws and regulations
pertaining to uranium and radon management and under the current legislative
exposure limits prescribed for workers and the public, under the Nuclear Energy
Act, 1999 (as amended) and Regulations from the National Nuclear Regulator.  Environmental Regulation  Managing the impact of mining on the
environment is extensively regulated by statute in South Africa. Recent
statutory enactments set compliance standards both generally, in the case of
the National Environmental Management Act, and in respect of specific areas of
environment impact, as in the case of the Air Quality Act 2004, the National
Water Act (managing effluent), and the Nuclear Regulator Act 1999. Liability
for environmental damage is also extended beyond the corporate veil to impose
personal liability on managers and directors of mining corporations that are
found to have violated applicable laws. The impact on the environment by mining
operations is extensively regulated by the MPRDA. The MPRDA has onerous
provisions for personal liability of directors of companies whose mining
operations have an unacceptable impact on the environment. Mining companies are also required to
demonstrate both the technical and financial ability to sustain an ongoing
environmental management program, or EMP, and achieve ultimate rehabilitation,
the particulars of which are to be incorporated in an EMP. This program is required
to be submitted and approved by the DMR as a prerequisite for the issue of a
new order mining right. Various funding mechanisms are in place, including
trust funds, guarantees and concurrent rehabilitation budgets, to fund the
rehabilitation liability. The MPRDA imposes specific, ongoing
environmental monitoring and financial reporting obligations on the holders of
mining rights.  We believe that our environmental risks have been
addressed in EMPs which have been submitted to the DMR for approval.
Additionally, key environmental issues have been prioritized and are being
addressed through active management input and support as well as progress
measured in terms of activity schedules and timescales determined for each
activity.  Our existing reporting and controls framework is
consistent with the additional reporting and assessment requirements of the
MPRDA.  Amendment Bill to the MPRDA  On March 6, 2014 the South African Parliament
approved an Amendment Bill to the MPRDA. The Bill will come into effect once
signed by the President of the Republic of South Africa. Some of the more
important changes introduced by the Bill is to allow the holder of a Mining
Right to also mine “associated minerals” not specifically included in the
Mining Right; it addresses anti-competitive conduct by requiring the Minister
of Minerals to refuse an application for exploration rights if it will cause a
“concentration of rights” as defined in the Bill; historic and old mine dumps
are to be included in the definition of “residue stockpiles” and certain
rehabilitation obligations are created in respect of the discarded mines to
which they pertain; and liability for rehabilitation will extend beyond the
issuance of a closure certificate and financial provision for closed sites will
be required to be maintained for a period of 20 years after a site is closed.
Should the amendment bill to the MPRDA be enacted in its currently proposed form,
the latter three amendments referred to above may have a fundamental impact on
the Group's estimated environmental provisions.  The Bill was finally withdrawn by the
Minister of Mineral Resources on 22 August 2018, citing, amongst other things,
that there were no inherent inhibitions from the subsistence of the MPRDA in
current form.  Financial Provision for Rehabilitation  We are required to make financial provision for the
cost of mine closure and post-closure rehabilitation, including monitoring once
the mining operations cease. We fund these environmental rehabilitation costs
by irrevocable contributions to environmental trust funds that function under
the authority of trustees that have been appointed by, and who owe a statutory
duty of trust to the Master of the High Court of South Africa. The funds held
in these trusts are invested primarily in interest bearing debt securities. As
of June 30, 2018, we held a total of R118.0 million (2017: R110.5 million) in
trust, the balance held in each fund being R107.5 million (2017: R100.6
million) for Ergo and R10.5 million (2017: R9.9 million) for ERPM.
Trustee meetings are held as required and quarterly reports on the financial
status of the funds, are submitted to our board of directors. If any of the
operations are prematurely closed, the rehabilitation funds may be insufficient
to meet all the rehabilitation obligations of those operations.  Whereas the old Minerals Act allowed for the
establishment of a fully funded rehabilitation fund over the operational life
of mine, the MPRDA assumes a fully compliant fund at any given time. Insurance
instruments may also be utilized to make up the shortfall in available cash
funds subject to the DMR’s consent. The Company has subsequently made use of
approved insurance products for a portion of its rehabilitation liabilities. As
of June 30, 2018, we held a total of R126.0 million (2017: R117.2 million) in
funds held in insurance instruments. As at June 30, 2018 guarantees amounting
to R427.3 million (2017: R427.3 million) were issued to the DMR.  The provision for environmental rehabilitation for
the group was R553.4 million at June 30, 2018, compared to R531.7 million at June
30, 2017. The provision for environmental rehabilitation for the group at June
30, 2016 consisted of R522.9 million included in provision for environmental
rehabilitation as well as R15.6 million included in liabilities classified as
held for sale.  2828


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New Financial Provisioning
Regulations (“FPR”) were promulgated on November 20, 2015 under the National
Environmental Management Act, 107 of 1998 (“NEMA”)by the Department of
Environmental Affairs (“DEA”).
Proposed amendments to the FPRs were published for public comment GNR 1228 GG
41236 of 10 November 2017 (“Draft Regulations”), which seek to address some
challenges relating to the implementation thereof.  Under the FRPs to be implemented by the DMR,
existing environmental rehabilitation trust funds, of which DRDGOLD has R118.0
million, may be used only for post closure activities and may no longer be
utilized for their intended purpose of concurrent and final rehabilitation on
closure. As a result, new provisions will have to be made for these activities.  Further amendments to the FPR, 2015 (“Proposed
Amendments”) were published on Friday, 21 September 2018, which extends the
compliance therewith to 19 February 2020.  The Proposed Amendments, in their current form and
which are still subject to the approval of the DMR and Treasury, allow under
certain circumstances for the withdrawal against financial provision (which is
currently not contemplated in the FPR, 2015). It is therefore uncertain whether
these provisions relating to withdrawal will remain in their current form, or
at all, in the draft which the DEA is aiming to publish for comment in November
2018.  Regulation 5(4) of the Proposed Amendments states
that the determination of financial provision must be undertaken by a
specialist, which according to the definitions listed in the Proposed
Amendments is an “independent person”. Regulation 10 of the Proposed Amendments
further requires the annual review and re-assessment of financial provision by
an independent specialist, which in terms of Regulation 11 of the Proposed
Amendments must also be audited by an independent auditor. The Proposed
Amendments do not require that the annual review and re-assessment of financial
provision be audited by a financial auditor.  4C. ORGANIZATIONAL STRUCTURE  The following chart shows our principal subsidiaries as of
September 30, 2018. All of our subsidiaries are incorporated in South
Africa. Our voting interest in each of our subsidiaries are equal to our
ownership interests. We hold the majority of the investments directly or
indirectly as indicated below.During fiscal year 2018, we completed a
reorganization of some of our subsidiaries to simplify our group structure.Refer to Exhibit 8.1 for a list of our
significant subsidiaries.                         2929


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4D. PROPERTY, PLANT AND EQUIPMENT  Description of Significant Subsidiaries'
Properties and Mining Operations, September 2018  FWGR  Overview  On July 31, 2018, we acquired surface
gold processing assets and tailing storage facilities that include Driefontein
3 and 5, Kloof 1, Venterspost North and South, Libanon, Driefontein 4,
Driefontein 2 plant, Driefontein 3 plant, WRTRP pilot plant, and land for the
development of a central processing plant, regional tailings storage facility
and return water dam (together, the “WRTRP Assets”) associated with
Sibanye-Stillwater’s WRTRP, to be known going forward as FWGR.  This
acquisition represents a significant increase in our assets, which will impact
our results in future years.  In connection with the acquisition, we issued to
Sibanye-Stillwater new shares equal to 38.05% of outstanding shares and granted
Sibanye-Stillwater an option to acquire up to a total of 50.1% of our sharesfor a period of 2 years from the effective
date of the acquisition at a 10% discount to the prevailing market value. For more information regarding this acquisition
refer to our Form 6-K, dated November 22, 2017 "Proposed Transaction to
acquire the WRTRP assets from Sibanye-Stillwater, waiver of mandatory offer and
cautionary announcement", incorporated by reference herein and Item 10C.
Material Contracts. We acquired the following assets as a result of the
acquisition:  Asset
 DescriptionAdditional tailings dams
 Movable surface tailings dams which form part of
  the gold assets of the WRTRP Assets and which include Driefontein Dumps 3 and
  5, Kloof 1, Venterspost North and South and Libanon Dump.DP2 Plant
 The Driefontein 2 Plant which is located on
  Portion 6 of Farm Blyvooruitzicht No 116 Registration Division I.Q. and
  Remainder of Portion 1 of the Farm Driefontein No 113, Registration Division
  I.Q., Gauteng Province.
  The DP2 Plant processes surface rock dumps (“SRD”)
  material, which is delivered by rail and truck. Throughput is achieved
  through two Semi-Autogenous Grinding (“SAG”) mills and a ball milling
  circuit, cyanide leaching and a Cleaning-in-place (“CIP”) plant. A
  Carbon-in-leach circuit was commissioned in 2014 at DP2 Plant to improve
  recoveries by replacing the aging CIP circuit.DP3 Plant
 The Driefontein 3 Plant which is located on
  Portion 6 of Farm Blyvooruitzicht No 116, Registration Division I.Q., Gauteng
  Province.The DP3 Plant
  was originally designed as a uranium plant, but wasconverted to process
  low-grade surface rock in 1998. Similar to DP2 Plant, SRD ore is delivered by
  rail and truck. This plant has four SAG mills followed by cyanide leaching
  and a CIP circuit.Driefontein 4
 The current active tailings deposition facility
  which forms part of the gold assets of the WRTRP Assets.Pilot Plant
 The moveable LogiProc pilot plant established to
  test the processes, techniques and assumptions made in the definitive level
  design of the full scale retreatment of dumps as part of the WRTRP Assets and
  located at Driefontein 1 Plant.Plan and Materials
 Any and all drawings, plans, studies (including
  feasibility studies of a geological or geotechnical nature), surveys, reports
  (including sampling and assaying reports), maps (including geophysical,geological
  and/or drill maps), statements, schedules and other data in whatever form of
  a financial, technical, labour, marketing,administrative, accounting
  or other matters pertaining to the WRTRP Assets.Transferring Land
 The land upon which:
  ·the proposed
  Central Processing Plant (“CPP”) will be located after the
  subdivision of the Farm Rietfontein No 347Registration Division I.Q.
  Portion 35 and 73, GautengProvince;and
  ·the Regional
  Tailing Storage Facility and Return Water Dam will  be located and which
  is proposed to form part of the WRTRP Assets.Active Tailings Dams
 The Driefontein 1 and 2, Kloof 2 and Leeudoorn
  currently active tailings dams will also be transferred,for no
  additional consideration, once they have been decommissioned by
  Sibanye-Stillwater.Licences to Operate
 All the licences, permits, permissions, management
  plans and reports, as well as amendments, variations or modifications thereof
  from time to time necessary for Sibanye-Stillwater to operate the WRTRP
  Assets lawfully.Access Rights
 The grant of access to DRDGOLD of the:
  ·Driefontein 10
  shaft;
  ·Kloof 10 shaft
  located in the Kloof mining area that is subject to the Kloof Mining Right,
  for the purpose of pumping and  supplying, at the cost of WRTRP, the
  required quantities of water, as licenced, for the WRTRP Assets;
  ·rights,
  servitudes and agreements for installation, supply and distribution and
  maintenance of power supply; existing and proposed pipeline routes;
  servitudes; wayleaves and surface right permits; and
  ·Driefontein1 Gold Plant
  for the purpose of accessing the Pilot Plant.
 3030


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Ergo  Overview  We
own 100% of Ergo. Ergo is a surface tailings retreatment operation operatingacross central and east Johannesburg.In order to improve synergies, effect cost savings
and establish a simpler group structure, DRDGOLD restructured the Group’s
surface operations (Crown,ERPM’s Cason Dump surface operation andErgoGold) into Ergo with effect from July 1, 2012.ERPM’s Cason Dump surface tailings retreatment operation was depleted in
the first half of fiscal year 2015.At June
30, 2018, Ergo employed 862 full-time employees. In addition, specialist
service providers deployed a further 1 426 employees to our operations
bringing the total number of in-house and outsourced employees to 2 288
(at June 30, 2017:2,215;at June 30, 2016:2,484).  Properties  The Ergo plant is located approximately 43 miles
(70 kilometers) east of the Johannesburg’s central business district in the
province of Gauteng on land owned by Ergo. Access to the Ergo plant is via the
Ergo Road on the N17 Johannesburg-Springs motorway. As of June 30, 2018, and
September 2018, no encumbrances exist on Ergo's property.  The Crown operation is situated on the outskirts of
Johannesburg, South Africa and consists of three separate locations, City Deep,
Crown Mines and Knights. The entire mining footprint consists of the mining
rights of City Deep, Consolidated Main Reef & Estates, Crown Mines (“3Cs”)
and Knights. Crown’s mining rights have been converted to new order rights
under the MPRDA and the mining rights in respect of the 3Cs and Knights were
registered at the Mineral and Petroleum Titles Registration Office in January
2014. Following the restructuring of the company into a single surface
retreatment business unit, these mining rights were transferred to Ergo in
March 2014.  The Crown Mines operation was located on the West
Wits line within the Central Goldfield of the Witwatersrand Basin,
approximately 6 miles (10 kilometers) west of the Johannesburg central business
district in the province of Gauteng. Access is via Xavier Road on the M1
Johannesburg-Kimberley-Bloemfontein highway. However, over a period of more
than 30 years our ore reserves in the western Witwatersrand had become
depleted. We therefore took a decision at the end of fiscal year 2016 that in
fiscal year 2017 we would complete the recovery of material from a number of
Crown reclamation sites and to close the Crown plant. This plant operated as a
pump/milling station feeding the metallurgical plants until March 2017 when it
ceased all operations. By the end of fiscal year 2018, most of the Crown sites
had been cleared and the rehabilitation of the Crown plant site, has
substantially been completed.  The City Deep operation is located on the West Wits
line within the Central Goldfields of the Witwatersrand Basin, approximately 3
miles (5 kilometers) south-east of the Johannesburg central business district
in the province of Gauteng. Access is via the Heidelberg Road on the M2
Johannesburg-Germiston motorway. The City Deep plant continues to operate as a
pump/milling station feeding the metallurgical plants.  The Knights operation is located at Stanley and
Knights Road Germiston off the R29 Main Reef Road. The Knights plant continues
to operate as a metallurgical plant.  History
  of Ergo2005
 Anglo American Corporation commissioned
  the Ergo plant in Brakpan in 1977. The operation became part of AngloGold
  Ashanti in 1998 and was closed by that company in 2005.2007
 Ergo was founded by EMO (owned by DRDGOLD
  at the time) and Mintails SA as a joint venture.On August 6, 2007, the joint venture
  parties entered into an agreement with AngloGold Ashanti - pursuant to which
  it acquired the remaining assets of the Ergo plant for a consideration of
  R42.8 million.Additional agreements were concluded with
  AngloGold Ashanti on November 14, 2007 for the acquisition by Ergo of
  additional tailings properties and the Brakpan/Withok TDF for a consideration
  of R45.0 million.2008
 Ergo Phase 1 was launched comprising the
  refurbishment and recomissioning of the Ergo plant’s first CIL circuit and
  the retreatment of the Elsburg and Benoni tailings complexes.DRDGOLD acquired Mintails SA’s stake in
  ErgoGold for R277.0 million.2009
 Ergo Phase 1 commissioning continued;
  first feeder line to the Ergo Plant from Elsburg tailings complex came into
  operation.Ergo Phase 2 exploration drilling for
  gold, uranium and acid completed.2010
 DRDGOLD acquired control of Ergo through
  the acquisition of Mintails SA’s 50% in Ergo for R82.1 million.Ergo Phase 1 production ramp-up nears
  completion with the installation of the second Elsburg tailings complex
  feeder line to the Ergo plant. Construction of the Crown/Ergo pipeline
  commenced.2011
 Construction of the Crown/Ergo pipeline
  continued and the second CIL circuit of the Ergo plant was refurbished as
  part of the Crown/Ergo pipeline project.2012
 The construction of the Crown/Ergo
  pipeline and second CIL circuit of the Ergo plant was completed.2013
 To improve synergies, effect cost savings
  and implement a simpler group structure DRDGOLD restructured the Group’s
  surface operations into Ergo on July 1, 2012, which consisted of Crown, the
  surface operations of ERPM and ErgoGold. Construction and commissioning of
  the Ergo flotation/fine-grind plant (FFG) was completed in late December
  2013.2014
 The FFG was suspended in April 2014 after
  metallurgical efficiencies declined. Test-work recommenced in August.A prospecting right in respect of surface
  tailings dumps on various portions of the Farm Grootvlei and a portion of the
  Farm Geduld was registered on May 12, 2014 for a period of 5 years ending on
  April 21, 2019.2015
 The FFG became fully operational in
  February 2015.Ministerial consent in terms of section
  11 of the MPRDA for the restructuring of the Group’s surface operations into
  Ergo were obtained.2016
 A legal review of the existing
  authorisations was undertaken for increasing the deposition capacity of the
  Brakpan/Withok TDF. The results indicated that most of the current
  authorisations are sufficient, however certain documentation will need to be
  amended.
 3131


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History
  of Crown (consolidated into Ergo on July 1, 2012)1979-2012
 Crown was an operating mine2013
 On July 1, 2012, Crown sold its mining
  assets, mining and prospecting rights and certain liabilities to Ergo in
  exchange for shares in Ergo.2015
 Ministerial consent in terms of section
  11(2) of the MPRDA to cede the converted mining rights of Crown to Ergo was
  obtained and in August 2015 the converted mining rights were registered.2017
 Crown plant ceased all operations in
  March 2017 and final rehabilitation of the site commenced.
 Mining and Processing  Ergo undertakes the retreatment of surface tailings.  Material processed by Ergo is sourced from primary surface sources
namely, sand and slime. The surface sources have generally undergone a complex
depositional history resulting in grade variations associated with improvements
in plant recovery over the period the material was deposited. Archive material
is a secondary source of gold bearing material. This material is generally made
up of old gold metallurgical plant sites.  Our
two gold producing metallurgical plants, Ergo and Knights have an installed
capacity to treat approximately 25 million tons of material per year based on
92% availabilityand are fully operational.All of the plants have
undergone various modifications during recent years resulting in significant
changes to the processing circuits. The City Deep plant continues to operate as
a pump/milling station feeding the metallurgical plants. The Crown plant
operated as a pump/milling station feeding the metallurgical plants until March
2017 when it ceased all operations.  Ergo’s assets include: access to tailings deposited
across the western, central and eastern Witwatersrand; a 50km pipeline; and
tailings deposition facilities including the significant Brakpan/Withok TDF.  The
feed stock is made up of sand and slime which are reclaimed separately. Sand is
reclaimed using mechanical front-end loaders, re-pulped with water and pumped
to the plant. Slime is reclaimed using high pressure water monitoring guns also
known as hydraulic reclamation. The re-pulped slime is pumped to the plant and
the reclaimed material is treated using screens, cyclones, ball mills as well
as floatation and fine grind, or FFG, and Carbon-in-Leach, or CIL, technology
to extract the gold.  Set
forth below is a description of each of our plants:  Ergo Plant:Commissioned by Anglo American Corporation in 1977, became part of AngloGold
Ashanti in 1998 from which it was acquired for a consideration of
R42.8 million in 2007. The remaining five CIL tanks were refurbished
during fiscal year 2015 to increase capacity to treat up to 25.2Mt per year.
The Ergo FFG project is designed to assist in liberating the gold particles
currently encapsulated in the sulphides and to achieve a targeted improvement
in gold recovery efficiencies of between 16% and 20%. This circuit commenced a
three month test phase during August 2014 after it was temporarily suspended in
April 2014 following a decline in metallurgical efficiencies.By February 2015the FFG
was returned to full operation.  Knights
Plant:Commissioned in 1988, this
surface/underground plant comprises a circuit including screening, primary
cycloning, milling in closed circuit with hydrocyclones, thickening, oxygen
preconditioning, CIL, elution, electro-winning and smelting to doré. The
Knights plant, although historically part of the Crown operation, is located
further east and considerably closer to the Brakpan TDF. Due to the location of
the Knights plant it is able to access the Brakpan TDF to deposit waste. The
Knights plant has an installed capacity to treat an estimated 3.6Mt per year.  Crown
Plant:Commissioned in 1982, this
surface/underground plant comprises a circuit including screening, primary
cycloning, open circuit milling, thickening, oxygen preconditioning, CIP and
CIL, elution, zinc precipitation followed by calcining and smelting to doré. In
June 2012, the gold extraction portion of the Crown plant was discontinued. It
continued to screen, mill and thicken material before being pumped to the Ergo
plant for the final extraction of gold up to March 2017 when all operations
were ceased at this plant. The rehabilitation of the Crown plant site has
substantially been completed by the end of fiscal year 2018.  City
Deep Plant:Commissioned in 1987, this
surface/underground plant comprises a circuit including screening, primary,
secondary and tertiary cycloning in closed circuit milling, thickening, oxygen
preconditioning, CIL, elution and zinc precipitation followed by calcining and
smelting to doré. Retreatment continued at the City Deep Plant until the plant
was decommissioned in August 2013 to operate as a milling and pump station and
is currently pumping material to the Ergo Plant for the final extraction of
gold.  3232


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As of June 30, 2018, the net book value of Ergo’s mining assets
was R1 410.7 million (2017: R1,484.0 million).  Capital Expenditure  For a discussion of capital expenditures in
fiscal years 2016, 2017 and 2018, see "Item 5.A. Operating and Financial
Review and Prospects—Capital expenditure".  Currently there are no material plans to construct
or further expand Ergo’s facilities other than optimising and maintaining
existing facilities.Capital expenditure is financed through cash
resources and operational cash flows while financing for significant growth
projects may be obtained through specific financing arrangements if required.
For a summary of capital expenditure, see Item 5A. Operating Results.  Exploration and Development  Exploration and development activity at Ergo
involves the drilling of surface dumps and evaluating the potential gold
bearing surface material.  Environmental and Closure Aspects  Municipal infrastructure as well as commercial and
residential developments have encroached towards the Ergo operation. The major
environmental risks are associated with dust from various reclamation sites,
and effective management of relocated process material on certain tailings
dams. The impact of windblown dust on the surrounding environment and community
is addressed through a scientific monitoring and evaluation process, with
active input from Professor H. Annagran from theCape Peninsula University of Technologyand appropriate community involvement.
Environmental management programs, addressing a wide range of environmental
issues, have been prepared by specialist environmental consultants, which are
audited annually. Water pollution is controlled by means of a comprehensive
system of return water dams which allow for used water to be recycled for use in
Ergo’s metallurgical plants. Overflows of return water dams may, depending on
their location, pollute surrounding streams and wetlands. Ergo has an ongoing
monitoring program to ensure that its water balances (in its reticulation
system, on its tailings and its return water dams) are maintained at levels
that are sensitive to the capacity of return water dams.  Dust pollution is controlled through an active
environmental management program for the residue disposal sites and chemical
and organic dust suppression on recovery sites. Short-term dust control is
accomplished through ridge ploughing the top surface of dormant tailings dams.
Additionally, environmentally friendly dust suppressants are applied. Dust
fall-out is monitored through an extensive dust monitoring network monthly, and
is utilized as a management measure to ensure the effectiveness of mitigation
measures employed. In the long-term, dust suppression and water pollution is
managed through a program of progressive vegetation of the tailings followed by
the application of lime, to reduce the natural acidic conditions, and
fertilizer to assist in the growth of vegetation planted on the tailings dam.  A program of environmental restoration that
provides for the rehabilitation of areas affected by mining operations during
the life of the mine is in place. The surface reclamation process at Ergo has
several environmental merits as it removes potential pollution sources and
opens up land for development.  Environmental management and compliance is
further assisted by the in–house developed electronic monitoring system
(Compliance Management Tool) that incorporates all existing Environmental
Impact Assessments (“EIAs”), EMPs, Mining Right Conversions, Performance
Assessments and Social and Labor Plans (“SLPs”) associated with each mining
right. The existing and most recent studies are used to supplement the
management components with regards to the mining right boundaries and its
required compliance parameters. The individual management items are integrated
to provide a holistic overview of the state of each of the mining right areas.
Spatial data pertaining to the mining right boundaries is stored onto a central
database and is utilized to create a live map which illustrates the mining
right area and various environmental monitoring systems. This map depicts the
mining right boundaries, roads, rails, mine dumps, plants, rivers, pipeline
routes, servitudes, way leaves, municipal services and other spatial data relevant
to our mining operations.  While the ultimate amount of rehabilitation
costs to be incurred is uncertain, we have estimated that the total cost for
Ergo, in current monetary terms as at June 30, 2018 is approximately R535.9
million. As at June 30, 2018, a total of R107.5 million is held in the Ergo
Rehabilitation Trust Fund, previously called the Crown Rehabilitation Trust
Fund, which is an irrevocable trust, managed by specific responsible people who
we nominated and who are appointed as trustees by the Master of the High Court
of South Africa. In addition, a total of R47.8 million is held in insurance
instruments.  Ore Reserves  As at June 30, 2018, our Proven and Probable Ore
Reserves of Ergo was 3.3 million ounces. As at June 30, 2017 Proven and
Probable Ore Reserves was 3.0 million ounces. A Mineral Resource competent
person is appointed at each operation to review our Ore Reserve calculations
for accuracy. For Ergo, Mr. Gary Viljoen is the designated competent
person in terms of the SAMREC Code responsible for the compilation and
reporting of ore reserves. Ore reserves were independently reviewed by Red Bush
Geoservices Proprietary Limited (Red Bush) for compliance with the SAMREC Code,
the National Instrument 43-101 and the United States Securities and Exchange
Commission (SEC) Industry Guide 7.    3332


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Production  For fiscal year 2018, we achieved an increase in
production from  137 114 ounces to  150 423 ouncesmainly due to the average yield that increased from
0.171g/t to 0.193g/t. This wasmainly a consequence of(i)not having treated material from the Crown
sites during fiscal year 2018 compared to fiscal year 2017 during which material
from various Crown sites was treated until the said Crown sites were closed, as
well as (ii) processing higher grade material reclaimed from the 5A9 and 4L30
dumps through the Knights Plant.Volume
throughput decreased during fiscal year 2018 to 24.3Mt compared to 25.0Mt in
fiscal year 2017.  Cash operating costs in fiscal year 2018 was down
$4 per ounce from $1,122 in fiscal year 2017 to $1,118 per ounce mainly due to
the increased production.  The following table details certain
  production and financial results of the Group (consisting of the production
  results of Ergo) for the past three fiscal years.2018
 2017
 2016Production
  (imperial)Ore milled ('000 tons)
 24 281
 24 958
 24 842Recovered grade (oz/ton)
 0.006
 0.005
 0.005Gold produced (ounces)
 150 423
 137 114
 143 457Results of OperationsRevenue (R million)
 2 490.4
 2 339.9
 2 433.1Cost of sales (R million)
 2 347.7
 2 307.9
 2 236.8Cash operating cost (R million)
 2 159.7
 2 087.9
 1 991.2Cash operating costs (R/kilogram)(1)
 458 866
 489 549
 446 153All-in sustaining costs (R/kilogram)(1)
 505 622
 530 930
 499 425All-in cost (R/kilogram)(1)
 524 651
 552 243
 512 353(1) Cash operating cost, cash operating
  costs per kilogram, all-in sustaining costs per kilogram and all-in costs per
  kilogram are financial measures of performance that we use to determine cash
  generating capacities of the mines and to monitor performance of our mining
  operations. These are all non IFRS measures. For a reconciliation of these
  measure see Item 5A.: “Operating Results - Reconciliation of cash cost per
  kilogram, all-in sustaining costs per kilogram and all-in costs per
  kilogram.”
 See
Item 5A. Operating Results – Capital expenditure for a discussion on capital
expenditure.  ERPM  Overview  As at June 30, 2018 DRDGOLD owns 100% of ERPM. ERPM
consists of an underground section that was halted in October 2008. At June 30,
2018, ERPM had no employees. The financial results and assets and liabilities
of these halted underground operations are included in ‘Corporate office and
other reconciling items’ in the financial statements for segmental reporting
purposes for all three years presented.  Property  ERPM is situated on the Central Rand Goldfield located within and
near the northern margin of the Witwatersrand Basin in the town of Boksburg, 20
miles (32 kilometers) east of Johannesburg on land owned by ERPM. Access is via
Jet Park Road on the N12 Boksburg-Benoni highway. Historically underground
mining and recovery operations comprised relatively shallow remnant pillar
mining in the central area and conventional longwall mining in the
south-eastern area. Surface reclamation operations including the treatment of
sand from the Cason Dump, was conducted through the Knights metallurgical
plant, tailings deposition facilities and associated facilities. Until
underground mining was halted in October 2008, the mine exploited the
conglomeratic South Reef, Main Reef Leader and Main Reef in the central area
and the Composite Reef in the south-eastern area. ERPM operates under mining
license ML5/1997 in respect of statutory mining and mineral rights.As of June 30,2018, and September 30,2018, no
encumbrances exist on ERPM's property.  At June 30, 2018, the net book
value of ERPM’s mining assets was zero due to the transfer of ERPM’s related
surface mining assets to Ergo as part of the restructuring which took place on
July 1, 2012.  3432


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History1895-2007
 ERPM was an operating underground gold
  mine2008
 On October 23, 2008, ERPM announced the
  suspension of drilling and blasting operations underground, following the
  cessation of pumping of underground water at the South West Vertical shaft on
  October 6, 2008 for safety reasons following the deaths of two employees. On
  November 19, 2008, we announced our intention to place on care and
  maintenance the underground operations of ERPM, and to proceed with a
  consultation process in terms of Section 189A of the Labor Relations Act to
  determine the future of the mine’s 1,700 employees.2013
 On July 1, 2012, ERPM sold all its
  surface mining assets (excluding its 50% interest in Ergo) and its 65%
  interest in ErgoGold to Ergo in exchange for shares in Ergo.2014
 During July 2014 EMO and ERPM entered
  into an agreement with ERPM South Africa Holding Proprietary Limited, the
  nominee of Australian based Walcott Capital for the disposal of certain of
  the underground mining and prospecting rights held by ERPM including the
  related environmental liabilities. This agreement is subject to a number of
  suspensive conditions including regulatory consent and permission which had
  not been fulfilled at the date of this report.2015
 Ministerial consent in terms of section
  11(2) of the MPRDA to cede the converted mining rights of ERPM’s surface
  operations to Ergo was obtained and in August 2015 the converted mining
  rights were registered.2017
 Management concluded the restructure of
  payment terms in support of the timely conclusion of the disposal of certain
  underground assets2018
 The contract to dispose of certain of the
  underground mining and prospecting rights, including the related liabilities,
  lapsed on 31 March 2018.
  Mining and Processing  ERPM’s underground gold mine is under care and
maintenance and has not produced any gold since fiscal year 2009.  Exploration and Development  ERPM has a prospecting right covering an area of
1,252ha (3,094 acres) of the adjacent Sallies mine, referred to as ERPM
Extension 1. The regional geology of the area indicates that there will be a
strike change due to faulting associated with an East-West trending sinistral
tear fault. In order to confirm the anticipated change in the geological
structure and hence payshoot orientation, it is envisaged that prospecting
would take place through development situated 50m in the footwall. Owing to
high induced stress experienced at depth, there will be concurrent over-stoping
(that is stoping taking place concurrently with development) on the reef plane
for safety reasons. Prior to this prospecting right in respect of ERPM Ext. 1
lapsing, an application for a mining right in respect of the same prospecting
footprint was made in terms of the provisions of the MPRDA. The said mining
right was approved and granted and the registration thereof took place in March
2012. The mining right will expire in January 2042.  An additional application to extend ERPM’s existing
prospecting right eastwards into the Rooikraal/Withok area, incorporating the
southern section of the old Van Dyk mining lease area and a small portion of
Sallies, was granted by the DMR in fiscal year 2007. Known as ERPM Extension 2,
the additional area is 5,500ha (13,590 acres). This prospecting right was
initially granted for a period of 4 years and expired in March 2011. An application
for renewal thereof was made in terms of the provisions of the MPRDA. The
renewal of the prospecting right was initially refused by the DMR, but after an
appeal was lodged with the Legal Services Directorate of the DMR, the renewal
of the prospecting right was granted in November 2014. These rights, ERPM Ext 1
and ERPM Ext 2, both formed part of the sale transaction with Walcott Capital
that has since lapsed.  Environmental and Closure Aspects  There is a regular ingress of water into the
underground workings of ERPM, which was contained by continuous pumping from
the underground section. Studies on the estimates of the probable rate of rise
of water have been inconsistent, with certain theories suggesting that the
underground water might reach a natural subterranean equilibrium, whilst other
theories maintain that the water could decant or surface. A program is in place
to routinely monitor the rise in water level in the various underground
compartments and there has been a substantial increase in the subsurface water
levels.  The government has appointed Trans-Caledon Tunnel
Authority (TCTA) to construct a partial treatment plant (neutralisation plant)
to prevent the ground water being contaminated. TCTA completed the construction
of the neutralisation plant for the Central Basin and commenced treatment
during July 2014. As part of the Heads of agreement signed in December 2012
between EMO, Ergo, ERPM and TCTA, sludge emanating from this plant is
co-disposed onto the Brakpan/Withok TDF. Partially treated water is then
discharged by TCTA into the Elsburg Spruit. This agreement includes the
granting of access to the underground water basin through one of ERPM shafts
and the rental of a site onto which it constructed its neutralisation plant. In
exchange, Ergo and its associate companies including ERPM have a set-off
against any future directives to make any contribution toward costs or capital
of up to R250 million.Through this agreement, Ergo also secured the
right to purchase up to 30 ML of partially treated AMD from TCTA at cost, in
order to reduce Ergo’s reliance on potable water for mining and processing
purposes.  While the ultimate amount of rehabilitation costs
to be incurred in the future is uncertain, we have estimated that as at June
30, 2018 the present discounted value of the total cost of rehabilitation for
ERPM is approximately R17.6 million (2017: R16.8 million. A total of R10.5 million
(2017: R9.9 million) is held in the Ergo Rehabilitation Trust Fund (previously
called the Crown Rehabilitation Trust Fund) for the benefit of ERPM and R73.7 million
(2017: R68.2 million) is held in insurance instruments and is available for the
settlement of these rehabilitation costs. The Ergo Rehabilitation Trust Fund is
an irrevocable trust, managed by specific responsible people who we nominated
and who are appointed as trustees by 3532


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the Master of the
High Court of South Africa.  Ongoing Legal Proceedings  Ekurhuleni Metropolitan Municipality (“Municipality”) Electricity
Tariff Dispute  Main Application  Integral to
Ergo’s gold extraction operation is its metallurgical plant at Brakpan (“Ergo
Plant”) located within the municipal boundaries of the Municipality.  In order
to operate the Ergo Plant and conduct its business operations, Ergo requires a
reliable and steady feed of electricity which it draws from Eskom’s Ergo
Central Substation.  Over the
past several years the Municipality has charged Ergo for such electricity, at
the Megaflex tariff, which is the rate at which Eskom charges its large power
users plus an additional surcharge.  Pursuant
to its own investigations, and after having sought legal advice on the matter,
Ergo determined that not only is it supplied by Eskom, not the Municipality,
but also that the surcharges levied were inconsistent with the provisions of
the Local Government: Municipal Systems Act (“Systems Act”), which sets down
clear and strict parameters in this regard. Ergo subsequently challenged the
Municipality, Eskom and the National Energy Regulator of South Africa (“NERSA”)
for declaratory relief. Included in the application are the Minister of Energy
Affairs, the Minister of Co-operative Governance & Traditional Affairs and
the South African Local Government Association, the latter 4 (four) respondents
against whom Ergo does not seek any relief and who have not opposed the
application.  Ergo
seeks the following relief: 1.     declaring that it is not supplied electricity by the
Municipality and that the Municipality is not authorised to levy a surcharge of
40% (“the D-tariff”) to the rate which Eskom ordinarily charges Ergo on its
Megaflex rate (“Eskom tariff”); 2.     declaring that the Municipality is in breach of its
temporary Distribution Licence (issued by NERSA) by purporting to supply
electricity to Ergo at the Ergo Plant; 3.     declaring that neither the Municipality nor Eskom may
lawfully insist that only the Municipality may supply electricity to Ergo at
the Ergo Plant; 4.     declaring
that Eskom presently supplies electricity to Ergo at the Ergo Plant; and 5.     directing
Eskom to conclude a consumer agreement with Ergo for the supply of electricity
at the Ergo Plant at Eskom’s Megaflex tariff.  Ergo,
also instituted a counterclaim against the Municipality for the recovery of the
surcharges which were erroneously paid to the Municipality in thebona fidebelief that they were due and payable prior to the Main Application of
approximately R43 million (these surcharges were expensed for accounting
purposes).  Consequently,
and pending the final determination of the Main Application by the High Court,
Ergo stopped paying the surcharges to the Municipality, paying and expensing only
the Eskom tariff and depositing the difference comprising the D-tariff into its
attorneys’ trust account as security in favour of the Municipality in the event
that the court rules against Ergo. These surcharges were not expensed but
recognised under cash and cash equivalents as restricted cash (refer to Item
18. ‘‘Financial Statements – Note 12”).  The Main Application has been set down for
hearing on 5 December 2018. Based on the probability of outflows, no liability
for any surcharges claimed by the Municipality has been recognised.  Urgent Application  In May 2015, the Municipality threatened to,
through an interruption to the Eskom supply grid, cause the supply of electricity
to the Ergo Central Substation to be terminated.  Ergo successfully interdicted
the Municipality, pending the determination of the Main Application.  The Municipality sought leave to appeal the
interdict, which application was rejected by the High Court. The Municipality
then successfully petitioned the Supreme Court of Appeal (“SCA”) in
Bloemfontein for leave to appeal thereto.  Ergo subsequently, and ultimately, petitioned
the Constitutional Court in Braamfontein, Johannesburg in December 2017 for
leave to appeal thereto against the latter judgment of the full bench of the
SCA, which found in favour of the Municipality. In January 2018, the
Constitutional Court rejected and refused to hear Ergo’s petition for a further
appeal.  This ruling enabled the Municipality to avail
itself of the credit control measures provided for in the Systems Act by
terminating the supply of electricity to Ergo, unless it paid the surcharges
levied in their entirety and which were retained in Ergo’s attorneys’ trust
account over to the Municipality.  On the date of the Constitutional Court
ruling, the money held in Ergo’s attorney’s trust account amounted to
approximately R126 million. In February 2018, Ergo paid R25.2 million (including
VAT) from the trust account to the Municipality, under protest and without
prejudice and/or admission of liability (refer to
Item 18. ‘‘Financial Statements – Note 24.2”). This amount was the difference between the surcharge of 11%
(“the J-tariff”) over the Eskom tariff which was introduced during the course
of 2017 “for bulk supplies at medium and high voltage situated in a position
designated by the Municipality as close-coupled to the Eskom grid”. The
J-tariff, which Ergo still deems to be irregular and disproportionate in
accordance with the provisions of the Systems Act, is significantly lower than
the previously imposed “D-tariff”. The balance, following the payments of the
R25.2 million, remains in the trust account of Ergo’s attorneys of record.
Subsequently, Ergo pays monthly to the 3632


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Municipality,
the amount calculated at the lower J-tariff in respect of its electricity
consumption, under protest and without prejudice and/or admission of liability
(refer to Item 18. ‘‘Financial Statements –
Note 24.2”).  Ergo’s legal team is confident about the
prospects of success in the Main Application on the basis that the Municipality
does not supply electricity to Ergo or in any manner add value to Eskom’s
supply of electricity to Ergo. Ergo is furthermore, in terms of the Main
Application, in addition to its contention that the Municipality does not
supply electricity to it and not licensed to supply it, challenging the
imposition of both the J-tariff and D-tariff on the grounds that they are,inter
alia, ultra viresand beyond the scope of the Municipality’s Electricity
By-Laws, the Systems Acts as well as the Credit Control and Debt Collection
By-Laws.  The Main Application has been set down for
hearing on 5 December 2018. Based on management’s assessment of the probability
of outflows, no liability for any surcharges claimed by the Municipality has
been recognised.  Silicosis Litigation  In January 2013, DRDGOLD, ERPM (“DRDGOLD Respondents”)
and 23 other mining companies (“Other Respondents”) (collectively referred to
as "Respondents") were served with a court application issued in the
High Court of South Africa (“Court") for a class certification
(“Certification Application”) on behalf of former mineworkers and dependents of
deceased mineworkers (“Applicants”). In the application the Applicants allege
that the Respondents conducted underground mining operations in a negligent and
complicit manner causing the former mineworkers to contract occupational lung
diseases. The Applicants have as yet not quantified the amounts which they are
demanding from the Respondents in damages.  In May 2016, the Court granted an order for,inter
alia, (1) certification of two industry-wide classes: a silicosis class and
a tuberculosis class, both of which cover current and former underground
mineworkers who have contracted the respective diseases (or the dependants of
mineworkers who died of those diseases); and (2) that the common law be
developed to provide that in instances where a claimant claiming general
damages passed away, the claim for general damages will be transmitted to the
estate of the deceased claimant. This order did not represent a ruling on the
merits of the Application brought against the Respondents.  An application for leave to appeal to the Supreme
Court of Appeal (“SCA”) was brought by each of the respondent mining companies
against the order of the Court, specifically on the allegations of the
certification and transmissibility of damages to the estate of a deceased
mineworker.  In June 2016, the Court granted leave to appeal to the
SCA against the transmissibility of damages but refused leave to appeal in
respect of the certification.  The DRDGOLD Respondents (together with each of the
Working Group companies) served a notice of appeal to petition the SCA against
the certification and the transmissibility of damages. The SCA granted leave to
appeal thereto on both issues in September 2016.  The appeal to the SCA was set down for hearing in
March 2018 but was subsequently postponed indefinitely by agreement between the
Applicants and the Respondent companies in the light of progress made by the
Working Group as described below. The SCA endorsed and upheld the postponement.  The Respondent companies formed a Working Group
consisting of representatives from each company to consider and discuss issues
pertaining to the action. DRDGOLD withdrew from the Working Group in January
2016.  The remaining members of the Working Group have all
raised accounting provisions during the 2017 calendar year due to progress made
by the Working Group towards a settlement with the Applicants. In May 2018, the
remaining members of the Working Group announced that a mediated settlement
agreement had been reached. The agreement is subject to certain suspensive
conditions, including the approval by the South African High Court after which
an effective date of the agreement will be set.  DRDGOLD is not a party to the Working Group’s mediated
settlement agreement and maintains the view that it is too early to consider
settlement of the matter, mainly for the following reasons: • the Applicants have as yet not issued and served a summons
(claim) in the matter; • there is no indication of the number of potential claimants that
may join the class action against the DRDGOLD respondents; • many principles upon which legal responsibility may be founded,
are required to be substantially developed by the trial court (and possibly
subsequent courts of appeal) to establish liability on the bases alleged by the
applicants.  In light of the above there is inadequate information
to determine if a sufficient legal and factual basis exists to establish
liability, and to quantify such potential liability.  ITEM 4A. UNRESOLVED STAFF COMMENTS  None.  3732


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ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS  The following Operating and Financial Review and Prospects section
is intended to help the reader understand the factors that have affected the
Company's financial condition and results of operations for the historical
period covered by the financial statements and management's assessment of
factors and trends which are anticipated to have a material effect on the
Company's financial condition and results in future periods. This section is
provided as a supplement to, and should be read in conjunction with, our
audited financial statements and the other financial information contained
elsewhere in this Annual Report. Our financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS) as issued by
the International Accounting Standards Board (IASB). Our discussion contains
forward looking information based on current expectations that involve risks
and uncertainties, such as our plans, objectives and intentions. Our actual
results may differ from those indicated in such forward looking statements.  5A. OPERATING RESULTS  Business overview  We are a South African gold mining company engaged insurface gold tailings retreatment, including exploration, extraction, processing and
smelting. All our surface tailings retreatment operations, including the
requisite infrastructure and metallurgical processing plants, are located in
South Africa. Our operating footprint is unique, in that it involves some of
the largest concentration of gold tailings deposits in the world, situated
within the city boundaries of Johannesburg and its suburbs.  The success of DRDGOLD’s long-term goal to extract as
much gold as possible from its assets depends, to a large extent, on how
effectively it continues to manage its resources.  DRDGOLD’s strategic thinking is informed by principles
of sustainable development. Our goal is to optimally exploit our entire
resource over the long term, thereby seeking sustainable benefits in respect to
the following capitals, each of which is essential to our operation –
financial, manufactured, natural, human and social capital.  We also aim to align and overlap the interests of each
of these capitals in such a manner that an investment in any one translates
into value-add in as many of the others as possible. We therefore seek to
achieve an enduring and harmonious alignment between them, and we pursue these
criteria in the feasibility analysis of each investment.  Our profit for fiscal 2018 decreased despite an increase
in gold produced of 10%. This was due to,inter alia, the following: ·the average rand gold price received having
decreased by 3%; ·the expense related to the increase in the
LTI scheme liability amounted to R17.2 million during fiscal 2018 compared to
to R10.0 million during fiscal 2017; ·a net income tax charge of R25.9 million compared
to a net income tax benefit of R50.4 million during fiscal 2017 which includes
a deferred tax rate adjustment of R12.8 million; ·non-recurring transactions costs on the
acquisition of the WRTRP assets from Sibanye-Stillwater of R9.0 million; and ·profit for fiscal year 2018 did not include
any profit on disposal of property, plant and equipment  The profit in fiscal year 2017 decreased versus the
prior year largely due to a 4% decrease in gold produced. The average rand gold
price received remained flat at R548,268.The lower gold production was due to a lower average yield as the
throughput volumes were consistent with fiscal year 2016.The profit for fiscal year 2017 also includes
a profit on disposal of property, plant and equipment of R12.9 million and a
net income tax benefit of R50.4 million which mainly consist of a deferred tax
rate adjustment of R37.5 million.  The profit in fiscal year 2016 includes a reversal
of an accrual of R22.7 million and a profit on disposal of property, plant and
equipment of R10.5 million.  On July 31, 2018, we completed the
acquisition of the gold assets associated with Sibanye-Stillwater’s WRTRP, to
be known going forward as FWGR.  This acquisition represents a significant
increase in our assets, which will impact our results in future years.  In
connection with the acquisition, we issued to Sibanye-Stillwater new shares
equal to 38.05% of outstanding shares, and granted Sibanye-Stillwater an option
to acquire up to a total of 50.1% of our sharesfor a period of 2 years from the effective date of the acquisition
at a 10% discount to the prevailing market value.  Key drivers of our operating results and principal factors
affecting our operating results  The principal uncertainties and variables facing our
business and, therefore, the key drivers of our operating results are:  ·The price of gold, which fluctuates both in terms of
dollars and rands; ·Our production tonnages and gold content thereof,
impacting on the amount of gold we produce at our operations; ·Our cost of producing gold, including the effects of
mining efficiencies; and ·General economic factors, such as exchange rate
fluctuations and inflation, and factors affecting mining operations in South
Africa.    3832


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Gold price  Our revenues are derived primarily from the sale of gold produced
at our surface tailings retreatment operations. As a result, our operating
results are directly related to the price of gold, which can fluctuate widely
and is affected by numerous factors beyond our control, including industrial
and jewelry demand, expectations with respect to the rate of inflation, the
strength of the U.S. dollar (the currency in which the price of gold is
generally quoted) and of other currencies, interest rates, actual or expected
gold sales by central banks, forward sales by producers, global or regional
political or economic events, and production and cost levels in major
gold-producing regions such as South Africa. In addition, the price of gold is
often subject to rapid short-term changes because of speculative activities.
The demand for and supply of gold affects gold prices, but not necessarily in
the same manner that supply and demand affect the prices of other commodities.
The supply of gold consists of a combination of new production from mining and
existing stocks of bullion and fabricated gold held by governments, public and
private financial institutions, industrial organizations and private
individuals. As a general rule we sell the gold produced at market prices to
obtain the maximum benefit from prevailing gold prices and we generally do not
hedge against changes in gold prices.However, during periods of medium-term
borrowings being incurred to fund specific growth projects that may introduce
some liquidity risk, we may enter into facilities to establish some price
protection to mitigate this liquidity risk (refer toItem 11. Quantitative and
Qualitative Disclosures About Market Risk – General). On September 3, 2018, Ergo Mining Proprietary Limited
entered into a zero cost collar, with respect to50,000 ounces of gold, spread equally over nine months commencing
September 2018.  The collar has a floor of R 565,000/kg and a ceiling of just
under R609,000/kg and will be settled in cash at the end of each month The following table indicates data relating to the
dollar gold spot prices for the 2018 and 2017 fiscal years:  2018 fiscal year
 2017 fiscal year
 Change$ per ounce
 $ per ounce
 %Closing gold spot price on June 30,
 1 252
 1 241
 1Lowest gold spot price during the fiscal
  year
 1 204
 1 128
 7Highest gold spot price during the fiscal
  year
 1 366
 1 366
 0Average gold spot price for the fiscal
  year
 1 297
 1 257
 32017 fiscal year
 2016 fiscal year
 Change$ per ounce
 $ per ounce
 %Closing gold spot price on June 30,
 1 241
 1 322
 (6)Lowest gold spot price during the fiscal
  year
 1 128
 1 051
 7Highest gold spot price during the fiscal
  year
 1 366
 1 324
 3Average gold spot price for the fiscal
  year
 1 257
 1 167
 8
  Our production has been sourced from South Africa, and
as a result, the impact of movements in relevant exchange rates is significant
to our operating results.The average gold price in rand (based on average spot
prices for the year)increasedby1%from R16 939per ounce in2016to R17 094per ounce in2017, anddecreasedby3%to R16 662per ounce in2018.  An increase/(decrease) of 10% in the rand gold price
throughout fiscal year 2018 would have increased/(decreased) revenue by
approximately R249.0 million (2017: R234.0 million).  Gold production In fiscal year 2018, we achieved an increase in gold
produced to  150 423 ounces (produced from 24.3 million tonnes milled at
an average yield of 0.193g/t) from  137 114 ounces in fiscal year 2017
(produced from 25.0 million tonnes milled at an average yield of 0.171g/t). This
wasmainly due to (i) not treating material from
the Crown sites that were closed during 2017 at a higher cost as well as (ii)
treating higher grade material reclaimed from the 5A9 and 4L30 dumps through the
Knights Plant during fiscal year 2018.  In fiscal year 2017, gold produced decrease to  137 114
ounces (produced from 25.0 million tonnes milled at an average yield of 0.171g/t)
from  143 457 ounces in fiscal year 2016 (produced from 24.8 million
tonnes milled at an average yield of 0.180g/t). The decrease in total gold
produced is mainly due to the lower average yield
achieved. The decrease in yieldwasdue to the reclaimed material from the Crown
sites in the western Witwatersrand that were closed during fiscal year 2017 that
required higher volumes of water to treat. As a result, the treatment system
contained more water than material, leading to lower densities and with no
capacity for augmentation with material from our other operating sites.  Cash operating costs  Cash operating costs is anon-IFRS financial measure of performance
that isreported tothe group’s chief operating
decision maker (CODM) andis used to monitor performance– refer
toItem 18. ‘‘Financial Statements - Note 21
– Operating Segments”.For a reconciliation of this measure see Item
5A.: “Reconciliation of cash cost per kilogram, all-in sustaining costs per
kilogram and all-in costs per kilogram”.  Cash operating costs include consumables, labor,
specialized service providers, electricity and other related costs incurred in
the 3932


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production of gold. Consumables, water and
electricity, labor, specialized service providers and other costs are the
largest components of cash operating costs. The breakdown of cash operating
costs into these costs are described in Item 5A.: “Comparison
of financial performance for the fiscal year ended June 30, 2018 with fiscal
year ended June 30, 2017”  General economic factors All our operations are located in South Africa. We are
exposed to a number of factors, which could affect our profitability, such as
exchange rate fluctuations, inflation and other risks relating to South Africa.
In conducting mining operations, we recognize the inherent risks and
uncertainties of the industry, and the wasting nature of the assets.  Effect of exchange rate fluctuations  For the fiscal years 2018, 2017 and 2016, all of our
revenues were generated from South African operations, all of our operating
costs were denominated in rand and we derived all of our revenues in dollars
before being translated to rands. As the price of gold is denominated in
dollars which is then translated into rands, the appreciation of the dollar
against the rand increases our profitability, whereas the depreciation of the
dollar against the rand reduces our profitability.  In fiscal year 2018 the Rand gold price received decreased
by 3% compared to fiscal year 2017 due to the combined impact of the average
Dollar gold price which increasedby4%and the average exchange rate of the rand against the
dollar that strengthened by 5%.  In fiscal year 2017 the Rand gold price received remained
flat compared to fiscal year 2016 reflecting the combined impact of the average
Dollar gold price which increasedby8%and the average exchange rate of the rand against the
dollar which strengthened by 6%.  In line with our long-term strategy of being an
unhedged gold producer, we generally do not enter into forward gold sales
contracts to reduce our exposure to market fluctuations in the Dollar gold
price or the exchange rate movements. If revenue from gold sales falls for a
substantial period below our cost of production at our operations, we could
determine that it is not economically feasible to continue commercial
production at any or all of our plants or to continue the development of some
or all of our projects. However, during periods when medium-term debt is
incurred to fund growth projects and hence introduce liquidity risk to the
Group, we may mitigate this liquidity risk by entering into facilities to
achieve price protection (referItem 11. Quantitative and Qualitative Disclosures
About Market Risk – General).  Effect
of inflation and exchange rates  In the past, our operations have been materially adversely
affected by inflation. If there is a significant increase in inflation in South
Africa, our costs will increase and if such a cost increase is not offset by an
increase in the rand price of gold, this will negatively affect our operating
results.  The movements in the rand/dollar exchange rate, based upon average
rates during the periods presented, and the local annual inflation rate for the
periods presented, as measured by the South African Consumer Price Index, or
CPI, are set out in the table below: Fiscal year endedYear
  ended June 30,
 2018
 2017
 2016(%)
 (%)
 (%)The average rand/dollar exchange rate
  (strengthened)/weakened by
 (5)
 (6)
 27CPI (inflation rate)
 4.6
 5.1
 6.3
  Recent developments  Revised Mineral Reserves  DRDGOLD began a drilling program and pre-feasibility study (PFS)
in September 2016 aimed at re-evaluating its surface gold tailings. The PFS
focused on tailings on the East Rand, to the east of the Ergo plant, with the
aim of adding these to the Mineral Reserve base. Mineral Reservesas measured under the SAMREC
codeincreased by 10% from 3.0Moz (299.2Mt @ 0.31g/t Au) in fiscal 2017
to 3.3Moz (332.2Mt @ 0.31g/t Au) in fiscal 2018 due to additional drilling
performed on the Rooikraal tailings deposition facility.  Key financial
and operating indicators  The table below presents the key performance
measurement data for the past three fiscal years: The financial results for the
years ended June 30, 2018, 2017 and 2016 below are stated in accordance with
IFRS as issued by the IASB. The table also includes the key performance
measures for our business and its profitability, which are revenue, gold
production, gold prices, operating costs, cash operating costs per kilogram,
all-in sustaining costs per kilogram and all-in costs per kilogram, capital
expenditure (additions to property, plant and equipment) and Ore Reserves.  4032


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Operating dataYear ended June 30,2018
 2017
 2016Revenue (R'm)
 2 490.4
 2 339.9
 2 433.1Gold production (ounces)
 150 423
 137 114
 143 457Gold production (kilograms)
 4 679
 4 265
 4 462Gold sold (ounces)
 149 604
 137 221
 143 232Gold sold (kilograms)
 4 653
 4 268
 4 455Average spot gold price (R/kilogram)
 535 696
 549 582
 544 608Average gold price received (R/kilogram)
 534 344
 548 268
 546 142Cost of sales (R'm)
 2 347.7
 2 307.9
 2 236.8Operating costs (R'm)
 2 207.1
 2 109.3
 2 030.2Cash operating costs (R'm)(1)
 2 159.7
 2 087.9
 1 991.2Cash operating costs (R/kilogram)(1)
 458 866
 489 549
 446 153All-in sustaining costs (R/kilogram)(1)
 505 622
 530 930
 499 425All-in costs (R/kilogram)(1)
 524 651
 552 243
 512 353Additions to property, plant and
  equipment (R'm)
 126.1
 116.3
 100.0Ore Reserves (ounces)
 3 280 000
 2 990 000
 1 840 000(1) Cash operating costs, cash operating
  costs per kilogram, all-in sustaining costs, all-in sustaining costs per
  kilogram and all-in costs and all-in costs per kilogram are non-IFRS
  financial measures of performance that we use to monitor performance. A
  reconciliation of these measures to cash operating costs, are included in
  Item 5A.: “Operating Results - Reconciliation of cash cost per kilogram,
  all-in sustaining costs per kilogram and all-in costs per kilogram.”
  Revenue  Revenue increased by 6% to R2 490.4 million in fiscal year
2018 from R2 339.9 million in fiscal year 2017 mainly due to a9% increase in gold sold from 4 268 kilograms
in fiscal 2017 to 4 653 kilograms in fiscal 2018 despite the average rand
gold price received having decreased by 3% to R534 344 per kilogram.  Revenue decreased by 4% to R2 339.9 million in fiscal year
2017 from R2 433.1 million in fiscal year 2016 mainly due to a4% decrease in gold sold from 4 455 kilograms
in fiscal 2016 to 4 268 kilograms in fiscal 2017. The average rand gold
price received having remained flatin fiscal year 2017compared tofiscal year 2016.  Refer to Item 5A:. “Operating
results: Key drivers of our operating results and principal factors affecting
our operating results” for a discussion regarding the impact of the gold price
received and the production levels on revenue.  Ore Reserves  As at June 30, 2018, our Ore Reserves(imperial)were
estimated at 3.3 million ounces, as compared to 3.0 million ounces at June
30, 2017, representing a 9.7% increase. The increase was mainly because of
a drilling program and PFS that commenced during September 2016 aimed at
re-evaluating our surface gold tailings. The drilling program continued in
fiscal year 2018. The increase was offset by depletion through ongoing mining
activities and other survey adjustments.  Our Ore Reserves (imperial) increasedfrom 1.8million
ounces atJune 30,2016, to
3.0 million ounces atJune 30,2017.The increase was mainly because of a drilling program and PFS that
commenced during September 2016. The increase was offset by depletion through
ongoing mining activities and other survey adjustments.  Our Ore Reserves (imperial)
decreasedfrom 1.9million ounces atJune
30,2015, to 1.8 million ounces atJune 30,2016, mainly because of
depletion through ongoing mining activities.  Year ended June 30,2018
 2017
 2016Ore Reserves
 Ounces
 Kilograms
 Ounces
 Kilograms
 Ounces
 Kilograms‘000
 
 ‘000
 
 ‘000Ergo
 3 280
 105 454
 2 990
 93 035
 1 840
 57 235Total Ore Reserves
 3 280
 105 454
 2 990
 93 035
 1 840
 57 235
  Capital expenditure  During fiscal year 2018, capital expenditure was R125.9 million,
compared to R110.6 million in fiscal year 2017, an increase of 4132


---

R15.3 million. Capital expenditure increased primarily as
a result of R41.3 million spent on the installation of two ball mills at Ergo
in order to process higher grade sand at better margins (these mills were reclaimed
from the now decommissioned Crown plant), R24.3 million spent on the ramp-up of
reclamation from the 4L50 slimes dam, which is the southern portion of the
Elsburg Tailings Complex, bordering Boksburg and Germiston; R14.4 million spent
on conversion of the Ergo plant’s electro-winning circuit to zinc precipitation
and EBDA also spent R17.8 million on building a new lodge to support training
services rendered.  During fiscal year 2017, capital expenditure was R110.6 million,
compared to R99.8 million in fiscal year 2016, an increase of R10.8
million. Capital expenditure increased primarily as a result of
R31.9 million spent on bringing new Reclamation Site 4L37on line, being one of three new reclamation sites that were
commissioned during fiscal year 2017 to replace the various Crown sites that
were closed, R29.5 million spent on theCentralised
Water Facility to reduce the use of potable water and reduce the associated
cost of water, R13.4 million spent on various exploration and grade
verification projects and the balance was spent on various other capital items.  Critical
accounting policies that require significant judgment  The preparation of the
consolidated financial statements requires management to make accounting
assumptions, estimates and judgements that affect the application of the
Group's accounting policies and reported amounts of assets and liabilities,
income and expenses. By their nature, judgments are subject to an inherent
degree of uncertainty. Accounting assumptions, estimates and judgements are
reviewed on an ongoing basis. Revisions to reported amounts are recognized in
the period in which the revision is made and in any future periods affected.
Actual results may differ from these estimates.  Management believes the
following critical accounting policies involve the more significant assumptions
and estimates used in the preparation of our consolidated financial statements
and could potentially impact our financial results and future financial
performance:  ·Depreciation of property, plant and equipment ·Impairment of property, plant and equipment ·Future environmental rehabilitation costs ·Income tax ·Long-term receivable  Management believes the
following critical accounting policies involve the more significant judgements
used in the preparation of our consolidated financial statements and could potentially
impact our financial results and future financial performance:  ·Assets and liabilities classified as held for
sale ·Long-term receivable ·Contingent liabilities  Management has discussed the development
and selection of each of these critical accounting policies with the Board of
Directors and the Audit and Risk Committee, both of which have approved and
reviewed the disclosure of these policies. This discussion and analysis should
be read in conjunction with the consolidated financial statements and related
notes included in Item 18. “Financial statements”.  Depreciation of property, plant and equipment  Depreciation of mining
property and development (including mineral rights) and mine plant facilities
are calculated using the units of production method which is based on the life
of mine.The group’s life of mine is
primarily based on proved and probable ore reserves and may include some
resources. It reflects the estimated quantities of economically recoverable
gold that can be recovered from reclamation sites based on the gold price
prevailing at the end of the financial year. Changes in the life of mine will
impact depreciation on a prospective basis. The life of mine is prepared using
a methodology that takes account of current information to assess the
economically recoverable gold from specific reclamation sites and includes the
consideration of historical experience.Other
assets are depreciated using the straight-line method over the expected life of
these assets.  Impairment of property, plant and equipment  The carrying amounts of property, plant and equipment
are reviewed at each reporting date to determine whether there is any
indication of impairment. If any such indication exists, the asset's
recoverable amount is estimated. The recoverable amount of an asset or
cash-generating unit is the greater of its value in use and its fair value less
costs to sell. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to
the asset. For the purpose of impairment testing, assets are grouped together
into the smallest group of assets which generates cash inflows from continuing
use that is largely independent of the cash inflows of other assets or groups
of assets, or the cash-generating unit. Each metallurgical plant or combination
of plants that, together with its deposition facility, is capable of operating
independently is considered to be a cash-generating unit. An impairment loss is
recognized directly against the carrying amount of the asset whenever the
carrying amount of an asset, or its cash generating unit, exceeds its
recoverable amount. Impairment losses are recognized in profit or loss.  Management considers such factors as the
market capitalization of the group, mineral reserves and resource estimates,
production estimates, spot and future gold prices, foreign currency exchange
rates, discount rates, estimates of costs to produce and future capital
expenditure in determining the recoverable amount.


---

Future environmental rehabilitation costs  Provisions for environmental rehabilitation are
provided at the present value of the costs expected to be incurred in the
future to settle the obligation based on current prices. The unwinding of the
obligation is included in profit or loss. Estimated future costs of
environmental rehabilitation are reviewed regularly and adjusted as
appropriate. Changes in estimates are capitalized or reversed against the
related asset but taken to profit or loss if there is no related asset left.
Gains or losses from the expected disposal of assets are not taken into account
when determining the provision.  Estimates of future environmental rehabilitation
costs are based on the Group’s environmental management plans which are
developed in accordance with regulatory requirements, the life-of-mine plan and
the planned method of rehabilitation which is influenced by developments in
trends and technology.  Income tax  Deferred tax is recognized in respect of temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for tax purposes.  The
deferred tax liability is calculated by applying a forecast weighted average
tax rate that is based on a prescribed formula. The calculation of the forecast
weighted average tax rate requires the use of assumptions and estimates and are
inherently uncertain and could change materially over time. These assumptions and
estimates include the expected future profitability and timing of the reversal
of the temporary differences. Due to the forecast weighted average tax rate
being based on a prescribed formula that increase the effective tax rate with
an increase in forecast future profitability, and vice versa, the tax rate can
vary significantly year on year and can move contrary to current period
financial performance.  Assets classified as held for sale  The assessment of whetheran asset is classified
as held for sale depends on whether thedisposal is highly probable and require the exercise of
significant judgement and estimates of the outcome of future events that are
not wholly within the control of the Group.  Long-term receivable  Our long-term receivable include payments
made under protest and is a non-derivative financial asset.  The assessment to define the accounting policy and
subsequent classification of the long-term receivable requires the exercise of
significant judgement of the outcome of future events that are not wholly under
the control of the Group. The judicial proceedings that impact on the long-term
receivable are inherently complex legal issues that are subject to
uncertainties and complexities and are subject to interpretation.  The fair value determination of the long-terms
receivable is determined using assumptions and estimates that are inherently
uncertain and can change materially over time. These assumptions and estimates
include estimating the timing of concluding on the main application, the
ultimate settlement terms, the discount rate applied and the credit risk
assessment for impairment purposes.  The long-term receivable is a non-derivative financial
asset categorised as loans and receivables. The asset is initially measured at
fair value and any difference between the face value of payments made and the
fair value of the long-term receivable on initial recognition are recognised in
profit or loss as a finance expense. Subsequent to initial recognition, the
long-term receivable is measured at amortised cost using the effective interest
method less any impairment losses. Unwinding of the carrying value is accounted
for as finance income.  Contingent liabilities  The assessment of the impact of contingent
liabilities require the exercise of significant judgement and estimates of the
outcome of future events that are not wholly within the control of the Group.
Litigation and other judicial proceedings inherently entail complex legal
issues that are subject to uncertainties and complexities and are subject to
interpretation.  Comparison
of financial performance for the fiscal year ended June 30, 2018 with fiscal
year ended June 30, 2017  Revenue  The following table illustrates the year-on-year change in revenue
for fiscal year 2018 in comparison to fiscal year 2017:  R
  million
 Total
 Impact of change in amount of gold sold
 Impact of change in gold price
 Net change
 Totalrevenue
 revenue2017
 2018Ergo
 2 339.9
 211.1
 (60.6)
 150.5
 2 490.4
  Revenue increased by R150.5 million, or 6%, to R2 490.4 million
during fiscal year 2018.This was mainly due
to a 9% increase in gold sold, reflecting a 10% increase in gold production. The
impact of the 9% increase in gold sold was offset in part by the average rand
gold price received which decreased by 3% to R534 344 per kilogram. 4332


---

Cost of sales  Cost of sales amounted to R2 347.7 million,
consisting mainly of operating costs of R2 207.1 million, depreciation of
R168.0million and a positive movement in
both change in estimate of environmental rehabilitation of R2.9 million and gold in process of R24.5 million. These are discussed as follows:  Operating costs  Operating costs were R2 207.1
million compared to R2 109.3 million for
fiscal year 2017. The increase was mainly due to inflationary increases.  Depreciation  Depreciation charges were R168.0
million for fiscal year 2018 compared to R179.8 million
for fiscal year 2017.  Retrenchment costs  No retrenchment costs were incurred in fiscal year 2018 compared
to R23.0 million incurred in fiscal year 2017 due to retrenchments related to
the closure of the various Crown sites which was completed in fiscal year 2017.  Change in estimate of environmental rehabilitation  As of June 30, 2018, we estimate our total rehabilitation
provision, being the discounted estimate of future costs, to be R553.4million
as compared toR531.7million at
June 30, 2017. Achange in estimate of
environmental rehabilitation of R2.9 million was recognized due to minor
changes in the planned rehabilitation activitiesof June 30, 2018
compared to fiscal year 2017.  A total of R118.0 million was
invested in our various environmental trust funds as at the end of fiscal year 2018,
as compared to R110.5 million at the end of fiscal year 2017. The increase
is attributable to R7.5 million interest received
on these funds during fiscal year 2018. A total of R126.0 million
(2017: R117.2 million) is invested infunds
held in insurance instruments to securefinancial guarantees provided to
the DMR through an insurance cell captive company, the Guardrisk Cell Captive. The
increase is attributable toR8.8million interest received on these funds during fiscal year 2018.As at June 30, 2018 guarantees amounting to R427.3 million were issued to the DMR (2017: R427.3
million).The shortfall between the invested funds and the estimated
provisions is expected to be financed by ongoing contributions to the Guardrisk
Cell Captive, over the remaining production life of the respective mining
operations and, at the time of mine closure, the proceeds on the disposal of
remaining assets and gold from plant clean-up.  Movements in gold in process  Movement in gold in process in fiscal year 2018 amounted to a benefit
of R24.5 million mainly due to an increase in the
volume of gold in the plant as at June 30, 2018 compared to June 30, 2017.  Administration expenses and general costs  Administration expenses and general costs increased by R21.3 million
from R69.4 million in fiscal year 2017 to R90.7 million
in fiscal year 2018. In fiscal year 2018 administration expenses and general
costs included R9.0 million related to transaction costs incurred on the
acquisition of the WRTRP assets from Sibanye-Stillwater, long-term incentives
of R17.2 million, legal costs amounting to R2.8 million and a loss on disposal
of fixed assets of R0.6 million. In fiscal year 2017,
administration expenses and general costs included long-term incentives of
R10.0 million and legal costs amounting to R6.1 million.  Finance income  Finance income decreased from R40.0 million
in fiscal year 2017 to R38.8 million in fiscal year 2018, mainly due tolower
average cash balances during the year.  Finance expenses  Finance expenses increased from R52.2
million in fiscal year 2017 to R58.4 million in fiscal year 2018, mainly attributable to the increase in the unwinding of
the provision for environmental rehabilitation and a fair value adjustment on
the initial recognition of the long-term receivable of R8.8 million.  Income tax  Income tax amounted to a charge of R25.9 million
for fiscal year 2018 (tax benefit amounting to R50.4 million for fiscal
year 2017) and consisted of current tax of R6.4 million,
mostly relating to non-mining income, and a deferred tax charge for fiscal year
2018 of R19.5 million, mostly relating to mining
income.  4432


---

The tax charge resulted from our profit before tax in fiscal year
2018 as well as a charge of R12.8 million relating to the forecast weighted
average deferred tax rate that increased from 18.6% in fiscal year 2017 to 20.3%
in fiscal year 2018 because of an increase in forecast profitability of Ergo.
The increase in the effective tax rate resulted in an increase in the deferred
tax liability and the associated tax charge.  Comparison
of financial performance for the fiscal year ended June 30, 2017 with fiscal
year ended June 30, 2016  Revenue  The
following table illustrates the year-on-year change in revenue for fiscal year 2017
in comparison with fiscal year 2016  R
  million
 Total
 Impact of change in amount of gold sold
 Impact of change in gold price
 Net change
 Totalrevenue
 revenue2016
 2017Ergo
 2 433.1
 (102.3)
 9.1
 (93.2)
 2 339.9
  Revenue decreased by R93.2 million, or 4%, to R2 339.9 million
during for fiscal year 2017.This was mainly
due to a 4% decrease in gold sold reflecting a 4% decrease in gold produced. The
average rand gold price received amounting to R548 268 per kilogram remained
flat compared to fiscal year 2016.  Cost of sales  Cost of sales amounted to R2 307.9 million,
consisting mainly of operating costs of R2 109.3 million,retrenchment costs of R23.0 million,depreciation of R179.8million, change in
estimate of environmental rehabilitation R0.6 million and a positive movement
in gold in process R4.8 million. These are discussed as follows:  Operating costs  Operating costs were R2 109.3 million compared
to R2 030.2 million for fiscal year 2016. The increase was mainly due toto the 5% increase in throughput, as well as general inflationary
increases, relatively high costs associated with the Crown clean-up and
increased trucking of sand material to the City Deep plant.  Depreciation  Depreciation charges were R179.8 million for fiscal year 2017
compared to R180.2 million for fiscal year 2016. Depreciation remained flat due
to the increase in depreciation resulting from the clean-up and closure of the
various Crown sites being offset by the net decrease in depreciation resulting
from the increase in the expected units-of-production in Ergo’s life of mine
that became effective on January 1, 2017.  Retrenchment costs  Retrenchment costs were R23.0 million in fiscal
year 2017 compared to nil in fiscal year 2016. These costs were incurred due to
closure of the various Crown sites.  Movements in provision for environmental rehabilitation  As of June 30, 2017, we estimate our total rehabilitation
provision, being the discounted estimate of future costs, to be R531.7million as compared toR522.9million at June 30, 2016. Refer to Item 18.
‘‘Financial Statements - Note 10 – Provision for environmental rehabilitation
and Note 23 – Assets and Liabilities classified as held for sale’’ of the
consolidated financial statements for a discussion of the increase in the
provision for environmental rehabilitation in fiscal year2017.  A total of R110.5 million was invested in our various
environmental trust funds as at the end of fiscal year 2017, as compared to R93.8 million
as of the end of fiscal year 2016. The increase is attributable to R6.8 million
interest received on these funds during fiscal year 2017. A total of R117.2 million
(2016: R108.3 million) is invested infunds
held in insurance instruments to securefinancial guarantees provided to
the DMR through an insurance cell captive company, the Guardrisk Cell Captive. The increase is attributable toR8.9million interest received on these funds during fiscal year 2017.As at June 30,2017,guarantees amounting to R427.3 million were
issued to the DMR(2016: R427.3
million).The shortfall between the invested funds and the estimated
provisions is expected to be financed by ongoing contributions to the Guardrisk
Cell Captive, over the remaining production life of the mining operations and,
at the time of mine closure, the proceeds on the disposal of remaining assets
and gold from plant clean-up.  Movements in gold in process  Movement in gold in process in fiscal year 2017 amounted to a benefit
of R4.8 million mainly due to a increase in the volume of gold in the plant as
at June 30, 2017 compared to June 30, 2016.  Administration expenses and general costs 4532


---

The administration expenses and general costs decreased by R17.8 million,
from R87.2 million in fiscal year 2016 to R69.4 million in fiscal
year 2017. In fiscal year 2017 administration
expenses and general costs included long term incentives of R10.0 million (2016:
R 29.9 million). These costs decreased mainly due to this decrease in the
share-based payment expense as well as implementation of various cost cutting
initiatives at the corporate office.  Finance income  Finance income increased from R36.8 million in fiscal year 2016
to R40.0 million in fiscal year 2017. The increase was mainly due tohigher average cash balances during the year.  Finance expenses  Finance expenses increased from R47.6
million in fiscal year 2016 to R52.2 million in fiscal year 2017, mainly
attributable to the increase in the unwinding of the provision for environmental
rehabilitation.  Income tax  Income tax amounted to a benefit of R50.4 million
for fiscal year 2017 (tax charge amounting to R46.9 million for fiscal
year 2016) and consisted of current tax of R1.9 million,
mostly relating to non-mining income, and a deferred tax benefit for fiscal
year 2017 of R53.4 million, mostly relating to
mining income.  The tax benefit resulted from
a loss before tax as well as a benefit of R37.5 million relating to the
forecast weighted average deferred tax rate that decreased from 23.1% in fiscal
year 2016 to 18.6% in fiscal year 2017 because of a decrease in forecast
profitability of Ergo. The decrease in the effective tax rate resulted in a
decrease in the deferred tax liability and the associated tax benefit. Cash operating costs, cash operating costs per kilogram, all-in
sustaining costs and all-in costs per kilogram  Cash operating costs per kilogram, all-in sustaining costs per
kilogram and all-in costs per kilogram are non-IFRS financial measures that
should not be considered by investors in isolation or as alternatives to cost
of sales, net profit/(loss) attributable to equity owners of the parent,
profit/(loss) before tax and other items or any other measure of financial
performance presented in accordance with IFRS or as an indicator of our
performance. While the World Gold Council provided guidance for the calculation
of cash operating costs, cash operating costs per kilogram, all-in sustaining
costs and all-in costs per kilogram may vary significantly among gold mining
companies, and these definitions by themselves do not necessarily provide a
basis for comparison with other gold mining companies. However, we believe that
these measures are useful indicators to investors and our management of an
individual mine's performance and of the performance of our operations as a
whole as they provide: ·an indication of a mine’s profitability and efficiency; ·the trend in costs; ·a measure of margin per kilogram, by comparison of the cash
operating costs per kilogram to the price of gold; and ·a benchmark of performance to allow for comparison against other
mines and mining companies.  For fiscal year 2018, cash operating costs per kilogram decreased by
6% to R458 866 per kilogram from R 489 549 per kilogram in fiscal
year 2017. All-in sustaining costs per kilogram decreased to R505 622 per
kilogram from R 530 930 per kilogram in fiscal year 2017. All-in costs per
kilogram decreased to R524 651 per kilogram of gold from R 552 243
per kilogram of gold in fiscal year 2017.The decrease in cash
operating costs per kilogram, all-in sustaining costs per kilogramandall-in costs per
kilogramwasmainly due to the
increase in gold production and completion of the rehabilitation of the Crown
footprint.  For
fiscal year 2017, cash operating costs per kilogram increased by 10% to R
489 549 per kilogram compared to R 446 153 per kilogram in fiscal
year 2016.This wasmainly due to
lower gold production resulting from the clean-up of the Crown sites that
caused a decrease in the average yield. The increase in the all-in sustaining
costs per kilogram to R 530 930 per kilogram from R 499 425 per
kilogram in fiscal year 2016 was mainly due to the increase in cash operating
costs, with reduced charges resulting from movement in gold in process,
movement in provision for environmental rehabilitation and corporate costs
mitigating the overall increase. The total all-in costs per kilogram increased
to R 552 243 per kilogram of gold from R 512 353 per kilogram of gold
in fiscal year 2016 due to the above increase in the all-in sustaining cost, as
well as increased retrenchment costs and growth capital expenditure.


---

2018
 2017
 2016Reconciliation
  of cash operating costs, cash operating costs per kilogram, all-in sustaining
  costs, all-in sustaining costs per kilogram, all-in costs and all-in costs
  per kilogramCost
  of sales
 2 347.7
 2 307.9
 2 236.8Depreciation
 (168.0)
 (179.8)
 (180.2)Retrenchment
  costs
 -
 (23.0)
 -Change
  in estimate of environmental rehabilitation
 2.9
 (0.6)
 (19.3)Movement
  in gold in process
 24.5
 4.8
 (7.1)Operating
  costs
 2 207.1
 2 109.3
 2 030.2Ongoing
  rehabilitation expenditure
 (26.7)
 (22.4)
 (27.8)Care
  and maintenance costs
 (8.2)
 (7.1)
 (10.5)Other
  operating income/(costs)
 (12.5)
 8.1
 (0.7)Cash
  operating costs(1)
 2 159.7
 2 087.9
 1 991.2Movement
  in gold in process
 (24.5)
 (4.8)
 7.1Administration
  expenses and other costs excluding non-recurring items(1)
 81.1
 69.4
 87.2Other
  operating (income)/costs
 12.5
 (8.1)
 0.7Change
  in estimate of environmental rehabilitation
 (2.9)
 0.6
 19.3Unwinding
  of rehabilitation provision
 45.6
 46.5
 43.0Sustaining
  capital expenditure(1)
 81.3
 72.9
 80.5All-in
  sustaining costs (1)
 2 352.8
 2 264.4
 2 229.0Retrenchment
  costs
 -
 23.0
 -Care
  and maintenance costs
 8.1
 7.1
 10.5Ongoing
  rehabilitation expenditure
 26.7
 22.4
 27.8Capital
  recoupment
 -
 (5.0)
 (0.2)Transaction
  costs incurred related to the acquisition of FWGR
 9.0
 -
 -Growth
  capital expenditure(1)
 44.7
 43.4
 19.5All-in
  costs(1)
 2 441.3
 2 355.3
 2 286.6Gold
  produced (kilograms)
 4 679
 4 265
 4 462Cash
  operating costs per kilogram (R per kilogram)
 458 866
 489 549
 446 153All-in
  sustaining costs per kilogram (R per kilogram)
 505 622
 530 930
 499 425All-in
  costs per kilogram (R per kilogram)
 524 651
 552 243
 512 353Reconciliation
  of sustaining capital expenditure and growth capital expenditureTotal
  capital expenditure/additions to property, plant and equipment
 126.1
 116.3
 100.0Growth
  capital expenditure(1)
 44.7
 43.4
 19.5Sustaining
  capital expenditure(1)
 81.3
 72.9
 80.5Reconciliation
  of growth administration expenses and administration expensesAdministration
  expenses and other costs
 90.7
 69.4
 87.2Loss
  on disposal of property, plant and equipment
 0.6
 -
 -Transaction
  costs incurred related to the acquisition of FWGR
 9.0
 -
 -Administration
  expenses and other costs excluding non-recurring items(1)
 81.1
 69.4
 87.2(1)See Glossary of Terms for
  definitions.
 4732


---

Cash operating costs  Cash operating costs are
linked directly to the level of throughput of a specific fiscal year.  The following table illustrates the year-on-year change in
cash operating costs for fiscal year 2018 in comparison with fiscal year 2017.  R million
 Cash operating costs
 Impact of change in throughput
 Impact of change in costs
 Net change
 Cash operating costs2017
 2018Ergo
 2 087.9
 (56.6)
 128.4
 71.8
 2 159.7
  Cash operating costs in
fiscal year 2018 increased by 3% to R2 159.7 million compared to cash
operating costs of R 2 087.9 million in fiscal year 2017.The below inflationary increases resulted from savings attributed
to having substantially completed the rehabilitation of the Crown footprint in
fiscal year 2017, as well as the centralised water management plant being in
operation for the full fiscal year 2018.  The following table illustrates the year-on-year
change in cash operating costs for fiscal year 2017 in comparison with fiscal
year 2016:  R million
 Cash operating costs
 Impact of change in throughput
 Impact of change in costs
 Net change
 Cash operating costs2016
 2017Ergo
 1 991.2
 9.3
 87.4
 96.7
 2 087.9
  Cash operating costs in
fiscal year 2017 increased by 5% to R 2 087.9 million compared to cash
operating costs of R 1 991.2 million in fiscal year 2016due to the 5% increase in throughput, as well as general
inflationary increases, relatively high costs associated with the Crown
clean-up and increased trucking of sand material to the City Deep plant.  The
  following table lists the major components of cash operating costs for each
  of the fiscal years set forth below:Years ended June 30,Costs
 2018
 2017
 2016Consumables
 36%
 38%
 36%Electricity and water
 19%
 20%
 20%Labor
 19%
 17%
 18%Specialized service providers
 15%
 14%
 14%Other costs
 10%
 11%
 12%
 4832


---

5B. LIQUIDITY AND
CAPITAL RESOURCES  Cash flows from operating activities  Cash generated from operating activities amounted
to R233.8 million for fiscal year 2018 (fiscal year 2017: R51.6 million
and fiscal year 2016: R415.9 million).  Cash generated from operating activities increased
during fiscal year 2018 due mostlyto a9% increase in gold sold despite the average rand
gold price received having decreased by 3% to R534 344 per kilogram. as
well as the net working capital movements that resulted in an inflow in cash of
R14.6 million in fiscal year 2018 compared to a outflow in cash of R117.8
million in fiscal year 2017.  Cash generated from operating activities decreased
during fiscal year 2017 due mostlyto a4% decrease in gold sold with the average rand
gold price received of gold sold remained flat as well as the net working
capital movements that resulted in an outflow of cash of R117.8 million in
fiscal year 2017 compared to a inflow in cash of R81.9 million in fiscal year
2016.  Cash generated from operating activities increased
during fiscal year 2016 due mostly to a 21% increase in the average rand gold
price received, despite a 5% decrease in gold sold, as well as the net working
capital movements.  Cash flows from investing activities  Net cash utilized by investing activities amounted
to R140.4 million in fiscal year 2018 compared to R96.7 million in
fiscal year 2017 and R107.2 million in fiscal year 2016.  In fiscal year 2018, net cash utilized by
investing activities mainly consisted of R125.9 million in additions to
property, plant and equipment and R21.5 million spent on environmental
rehabilitation payments. These outflows were reduced by R7.0 million proceeds
on the disposal of property, plant and equipment.  Additions to property, plant and equipmentin fiscal year 2018 were predominantly on: ☐R41.3 million spent on the installation of two ball mills at Ergo
in order to process higher grade sand at better margins (these mills were
reclaimed from the company’s now decommissioned Crown plant), ☐R24.3 million spent on the ramp-up of reclamation from the 4L50
slimes dam, which is the southern portion of the Elsburg Tailings Complex,
bordering Boksburg and Germiston; ☐R14.4 million spent on conversion of the Ergo plant’s
electro-winning circuit to zinc precipitation; and ☐R17.8 million on building a new lodge to support training services
rendered by EBDA.  In fiscal year 2017, net cash utilized by
investing activities consisted mainly of R110.6 million in additions to
property, plant and equipment and R11.6 million spent on environmental
rehabilitation payments. These outflows were reduced by R20.5 million proceeds
on the disposal of property, plant and equipment.  Additions to property, plant and equipmentin fiscal year 2017were predominantly on Ore Reserve
development, new infrastructure and new mining equipment at our operations.
Significant capital projects for Ergo during fiscal year 2017 included: ☐R31.9 million on Reclamation Site 4L37; ☐R29.5 million on the centralized water facility; ☐R13.4 million on various exploration and grade verification
projects; and ☐R42.1 million on various other capital items.  In fiscal year 2016, net cash utilized by
investing activities consisted mainly of R99.8 million in additions to
property, plant and equipment, R10.6 million spent on environmental
rehabilitation payments. These outflows were reduced by R7.0 million proceeds
on the disposal of property, plant and equipment.  Additions to property, plant and equipmentin fiscal year 2016 were predominantly to createincreased
flexibility and volume capacity, new
infrastructure and new mining equipment at our operations. Significant capital
projects for Ergo during fiscal year 2016 included: ☐R40.2 million spent onbringing the 4L2 reclamation
site on line; ☐R13 million on phase II of the refurbishment of the No 3 tailings
thickener; and ☐R46.6 million was spent on variousother
capital items.  Cash flows from financing
activities  Net cash outflow fromfinancing activities was R45.0 million
in fiscal year 2018 compared to R53.0 million in fiscal year 2017 and R281.1 million
in fiscal year 2016.  During fiscal year 2018, the net cash outflow
consisted mostly of a dividend payment of R42.2 million.  During fiscal year 2017, the net cash outflow
consisted mostly of a dividend payment of R50.6 million.  During fiscal year 2016, the net cash outflow
consisted mostly of a dividend payment of R252.9 million, R22.5 million
repayments of the Domestic Medium Term Note Program and R6.5 million related to
the acquisition of treasury shares in the market. 4932


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Cash and cash equivalents  Cash and cash equivalents as at June 30,2018 amounted to R 302.1 million compared to
R253.7 million at the end of fiscal year 2017 and R351.8 million at the end of
fiscal year 2016. Substantially all of our cash and cash equivalent balances
were denominated in South African rand.  Cash and cash equivalents as at June 30,2018 includes restricted cashin the form
of cash held in escrow amounting toR114.2million at
the end of fiscal year2018compared
toR92.7million at the end of
fiscal year2017andR47.7million at the end of fiscal year2016related to an electricity tariff dispute with Ekurhuleni
(refer to Item 4D. Ongoing legal proceedings). Restricted cash also includes guaranteesof R17.2 million compared to R16.1 million at
the end of fiscal year2017 and R15.2
million at the end of fiscal year 2016.  At September 30,2018, our cash and cash
equivalents were R244.7 million.  Borrowings and funding  Our available external sources of capital
includean overdraft facility of R100 million. Subsequent to year end,
this overdraft facility was incorporated into aR300 million Revolving Credit Facility describedin Item 10C. Material
Contracts – ZAR 300 million Revolving Credit Facility.  Anticipated funding requirements and sources  Existing operations Our cash and cash equivalents are set out above
under “Cash and cash equivalents”. Our management believes that existing cash
resources, net cash generated from operations and the availability of
negotiated funding facilities will be sufficient to meet the anticipated
commitments of our existing operations for fiscal year 2019.  West Rand Tailings Retreatment Project On July 31, 2018, we completed the acquisition of
the gold assets associated with Sibanye-Stillwater’s WRTRP, to be known going
forward as FWGR.  We have already embarked on the first phase of its
planned two-phase development. We secured a R300 million Revolving Credit Facility
from ABSA Bank Limited (acting through its Corporate and Investment Banking
division) to fund the anticipated capital expenditure required for phase 1.A description of the
Revolving Credit Facility is set forth below.  Phase 1 involves the upgrading of the Driefontein 2
plant to process tailings from the Driefontein 5 dump at a rate of between 400
000 and 600 000tpm and depositing the residue on the Driefontein 4 tailings
dam. First production is expected in the first quarter of calendar 2019.  Our estimated working capital, capital expenditure
and other funding commitments, as well as our sources of liquidity, for both
the existing operations as well as the development of FWGR would be adversely
affected if:  ·our operations fail to generate forecasted net cash
flows from operations; ·there is an adverse variation in the price of gold or
foreign currency exchange rates in relation to the US dollar, particularly with
respect to the rand; or ·our operating results or financial condition are
adversely affected by the uncertainties and variables facing our business
discussed under Item 5A. Operating Results or the risk factors described in Item
3D. Risk Factors.  In such circumstances, we could have insufficient
capital to meet our current obligations in the normal course of business, which
would have an adverse impact on our financial position and our ability to
continue operating as a going concern. We would need to reassess our
operations, consider further restructuring and/or obtain additional debt or
equity funding. There can be no assurance that we will obtain this additional
or any other funding on acceptable terms or at all.  5C. RESEARCH AND DEVELOPMENT, PATENTS AND
LICENSES, ETC.  DRDGOLD
has a dedicated team that looks at ways and means of improving recoveries.
While the team remains active with an ongoing focus on improving extraction
efficiencies, the projects undertaken during the year ended June 30, 2018 were
focused on optimizing the existing facilities rather than implementing new
technologies to improve extraction efficiencies. We have no registered patents
or licenses.  5032


---

5D. TREND INFORMATION  For the fiscal year 2019, we are planning
gold production from our Ergo operations of 148,000 to 154,000 ounces at cash
operating costs of approximately R490,000 per kilogram. Our ability to meet the
full year’s production target could be impacted by, among other factors, lower
grades and failure to achieve the targets set at Ergo. We are also subject to
cost pressures in the event of above inflation increases in labor, electricity
and water; crude oil and steel costs. Unforeseen changes in ore grades and
recoveries, unexpected changes in the quality or quantity of reserves and
resource, technical production issues, environmental and industrial accidents,
gold theft, environmental factors and pollution could adversely impact the
production, sales and cash operating costs for fiscal year 2019.  Our acquisition of WRTRP assets from
Sibanye-Stillwater will impact our results going forward, but we remain subject
to risks associated with acquired assets (refer Item 3D. Risk Factors—Risks
related to our business and operations). We may be unable to make desirable
acquisitions or to integrate successfully any businesses we acquire.  Refer toItem 5A.: “Key drivers
of our operating results and principal factors affecting our operating results”for a discussion of the trend in the US Dollar
gold price as well as the exchange rate impacting our business.  5E. OFF-BALANCE SHEET ARRANGEMENTS  The Company does not engage in off-balance sheet financing
activities, and does not have any off-balance sheet debt obligations, unconsolidated
special purposes entities or unconsolidated affiliates.  5F.
  TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSEstimated and actual payments
  due by periodTotal
 Less than
 Between
 Between
 More than 5 years1 year
 1-3 years
 3-5 yearsR m
 R m
 R m
 R m
 R mProvision for environmental
  rehabilitation (2)
 553.4
 56.2
 106.5
 85.6
 305.1Finance leases
 14.7
 3.5
 11.2
 -
 -Trade and other payables
 303.3
 303.3
 -
 -
 -Purchase obligations – contracted capital
  expenditure (1)
 32.7
 32.7
 -
 -
 -Other contractual obligations
 6.7
 2.8
 3.9
 -
 -Total contractual cash obligations
 910.8
 398.5
 121.6
 85.6
 305.1(1)Represents planned capital
  expenditure for which contractual obligations exist.(2)Gold mining companies are subject to
  extensive environmental regulations in the various jurisdictions in which
  they operate. These regulations establish certain conditions on the conduct
  of our operations. Pursuant to environmental regulations, we are also obliged
  to close our operations and reclaim and rehabilitate the lands upon which we
  have conducted our mining and gold recovery operations. The estimated closure
  costs at existing operating mines and mines in various stages of closure are
  reflected in this table. For more information on environmental rehabilitation
  obligations, see Item 4D. “Property, Plant and Equipment” and Note 10 -
  “Provision for environmental rehabilitation” under Item 18. “Financial
  Statements".
   5G.         SAFE HARBOR  See
Special Note Regarding Forward-Looking Statements.  ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES  6A. DIRECTORS AND
SENIOR MANAGEMENT  Directors and Executive Officers  Our board of directors may consist of not less than
four and not more than twenty directors. As of June 30, 2018, our board
consisted of seven directors.  In accordance with JSE listing requirements and our
Memorandum of Incorporation, or MOI, one third of the directors comprising the
board of directors, on a rotating basis, are subject to re-election at each
annual general shareholders’ meeting. Additionally, all directors are subject
to election at the first annual general meeting following their appointment.
Retiring directors normally make themselves available for re-election.  In accordance with the provisions of the agreement
for the acquisition of the WRTRP Assets, a director nominated by Sibanye‐Stillwater,
will be appointed as a non-executive director of the Board subject to the terms
of DRDGOLD’s MOI and shareholders’ approval.  The address of each of our Executive Directors and
Non-Executive Directors is the address of our principal executive offices.    5132


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Executive Directors Daniël Johannes
Pretorius (51)Chief Executive Officer. Niël Pretorius has two decades of
experience in the mining industry. He was appointed Chief Executive Officer
designate of DRDGOLD on August 21, 2008 and Chief Executive Officer on January
1, 2009. Having joined the company on May 1, 2003 as legal advisor, he was
promoted to Group Legal Counsel on September 1, 2004 and General Manager:
Corporate Services on April 1, 2005. Niël was appointed Chief Executive Officer
of Ergo Mining Operations Proprietary Limited (formerly DRDGOLD SA) on July 1,
2006 and became Managing Director thereof on April 1, 2008.  Adriaan Jacobus Davel (42)Chief Financial Officer.Riaan Davel joined DRDGOLD in January 2015. Before joining
DRDGOLD, he gained 17 years’ experience in the professional services industry,
the majority obtained in the mining industry in Africa. As part of gaining that
experience, Riaan provided assurance and advisory services, including support
and training on IFRS to clients and teams across the African continent. He has
spent seven years at KPMG as an audit partner, performing,inter alia,
audits of listed companies in the mining industry, including SEC registrants.
Riaan has also gained experience as an IFRS technical partner and represented
the South African Institute of Chartered Accountants on the International
Accounting Standards Board’s project on extractive activities from 2003 to
2010. Riaan has served on committees that compile/update the South African
codes for reporting and valuation of mineral reserves and resources.  Non-Executive Directors Geoffrey Charles Campbell (57).Geoffrey Campbell was appointed a Non-executive
Director in 2002, a senior independent non-executive director in December 2003 and
Non-executive Chairman in October 2005. A qualified geologist, he has worked on
gold mines in Wales and Canada. He spent 15 years as a stockbroker before
becoming a fund manager, managing the Merrill Lynch Investment Managers Gold
and General Fund, one of the largest gold mining investment funds. He was also
research director for Merrill Lynch Investment Managers. Geoffrey is a director
of Oxford Abstracts Limited.  James Turk (71).James Turk was appointed Non-executive Director in October 2004
and in 2011 met the JSE Listing Requirements to become an independent director.
He is a founder and director of Goldmoney Inc., which is traded on the Toronto Stock
Exchange. Goldmoney.com is an online provider of physical gold, silver,
platinum and palladium bullion to buyers worldwide and operator of a digital
gold currency payment system. Since graduating from George Washington University
in 1969, he has specialised in international banking, finance and investments.
Having begun his career with the Chase Manhattan Bank (now JP Morgan Chase), in
1980 James joined the private investment and trading company of a prominent
precious metals trader. He moved to the United Arab Emirates in 1983 to become
manager of the Commodity Department of the Abu Dhabi Investment Authority, that
country’s sovereign wealth fund. Since resigning in 1987, James has written
frequently on money and banking. He is the founder of Lend & Borrow Trust
Co. Ltd. a UK-based online peer-to-peer lending platform.  Edmund Abel Jeneker (56).Edmund Jeneker was appointed Non-executive Director in November
2007 and Lead Independent Non-executive Director in August 2017. He has more
than 30 years’ experience as an executive in banking, business strategy,
advisory and management at Grant Thornton South Africa Proprietary Limited,
Swiss Re Corporate Solutions Advisors South Africa Proprietary Limited, the
World Bank Competitiveness Fund and Deloitte South Africa. More recently, he
completed almost 14 years at Absa Bank and Barclays Africa Group, where he was
managing executive and served as director on the boards of several subsidiaries
in the Barclays Africa Group. Edmund is active in community social upliftment
and served as a member of the Provincial Development Commission of the Western
Cape Provincial Government. He currently serves on the Advisory Board of the
Institute of Directors Southern Africa, Investment Committee of BADISA and The
Cape Philharmonic Orchestra. He is a Chartered Director.  Johan Andries
Holtzhausen(72).Johan Holtzhausen was
appointed independent Non-executive Director in on April 25, 2014. He has more
than 42 years’ experience in the accounting profession, having served as a
senior partner at KPMG Services Proprietary Limited, and held the highest
Generally Accepted Accounting Principles (United States), Generally Accepted
Auditing Standards and Sarbanes-Oxley Act accreditation required to service
clients listed on stock exchanges in the United States. His clients included
major corporations listed in South Africa, Canada, the United Kingdom,
Australia and the United States. Johan currently serves as a voluntary
independent director and chairman of the Audit and Risk Committee of the
Tourism Enterprise Partnership. He also chairs the Audit and Risk Committee of
Tshipi é Ntle Manganese Mining Proprietary Limited. He is a Non-executive Director
of Caledonia Mining Corporation Plc, a Canadian corporation listed in the
United States, Canada and the United Kingdom, and he chairs its Audit and Risk
Committee.  Toko
Victoria Buyiswa Nomalanga Mnyango(53). Toko Mnyango was appointed
independent Non-executive Director on December 1, 2016. Toko began her career
as a prosecutor for the KaNgwane homeland, before becoming a legal advisor for
the Eastern Cape Development Corporation. She has held directorships on company
boards including Gijima, EOH Mthombo Proprietary Limited, AllPay Eastern Cape
Proprietary Limited, a subsidiary of ABSA Limited, and the Ryk Neethling
Foundation. She currently holds the position of CEO of Vitom Technologies
Proprietary Limited and Vitom Brands Communication Proprietary Limited.


---

Senior Management  Wilhelm Jacobus Schoeman (44)(Dip Analytical Chemistry,BTech Analytical Chemistry). Jaco Schoeman
joined DRDGOLD in 2011 as Executive Officer: Business Development to focus on
expanding the Group’s surface retreatment business and extracting maximum value
from existing resources. In July 2014, he was appointed Operations Director:
Ergo Mining Operations Proprietary Limited.  Henry Gouws (49)Managing Director: Ergo. Henry Gouws has 29
years’ experience in the mining industry. He graduated from Technikon
Witwatersrand and obtained a National Diploma in Extraction Metallurgy in 1990
and a National Higher Diploma in Extraction Metallurgy in 1991. He completed a
Management Development Program in 2003 through Unisa School of Business
Leadership and an Executive Development Programme in 2012 through the
University of Stellenbosch Business School. He was appointed Operations Manager
of Crown in January 2006 and General Manager in July 2006. He was appointed to
his current position in October 1, 2011.  Mark Burrell (56)Financial Director: Ergo. Mark Burrell holds a BComm Accounting
degree and has completed a Management Development Programme (MDP) and has 19
years’ experience in the mining sector. He joined DRDGOLD in 2004 on a
consulting basis and later that year, was appointed as Financial Manager of the
Blyvooruitzicht operation. He was appointed as Financial Director of Ergo in January
2012. Mark serves as an alternate director to Charles Symons on the Board of
Rand Refinery Proprietary Limited.  Charles Methley Symons (64) (BCom, MBL, Dip Extractive Metallurgy).Charles Symons started his career in the
mining industry in February 1977 and joined Crown Gold Recoveries Proprietary
Limited in January 1986. He joined DRDGOLD as General Manager in 1995 and was
appointed Executive Officer: Surface Operations on January 1, 2008 before he
became Executive Officer: Operations on May 11, 2010. On October 1, 2011, he
was appointed Chief Operating Officer. Following restructuring of senior
management in July 2014, Charles assumed the role of Chairman of the Oversight
Committee: Ergo Mining Operations Proprietary Limited. He was appointed
director of Ergo Mining Operations Proprietary Limited in August 2014. Charles’
fixed term contract concluded on July 31, 2016, but he remains in a
non-executive oversight role, which role terminates on December 25, 2018.  Reneiloe Masemene (37)(LLB, LLM). Reneiloe
Masemene, a qualified attorney, joined DRDGOLD in January 2009 as a legal
advisor. She was appointed to the position of Senior Legal Advisor in October
2011 and Prescribed Officer of Ergo Mining Proprietary Limited in June 2012.
She was appointed to the position of Group Legal Counsel in August 2014 and
Company Secretary in March 2016. Reneiloe has significant experience in all
areas of mining law, as well as in the corporate, commercial, contractual,
employment and litigious aspects related to mining.  There are no family relationships between any
of our non-executive directors, executive directors or members of the group
executive and senior management. There are no arrangements or understandings
between any of our directors or executive officers and any other person by
which any of our directors or executive officers has been so elected or
appointed. Furthermore, none of the non-executive directors, executive
directors, group executive and senior management members or other key
management personnel are elected or appointed under any undertaking by,
arrangement or understanding with any major shareholder, customer, supplier or
otherwise.  6B. COMPENSATION Our
MOI provide that the directors' fees should be determined from time to time in
a general meeting or by a quorum of Non-Executive Directors. The total amount
of directors' remuneration paid and or accrued for the year ended June 30, 2018
was R21.4 million.  Non-Executive Directors received the following fees
for fiscal year 2018:  ·Base fee as Non-Executive Chairman of R1,388,518
per annum; ·Base fee as Lead Independent Non-Executive
Director of R640,261 per annum; ·Base fee as Non-Executive Directors of R617,119
per annum; ·Annual fee for Audit and Risk Committee
Chairman of R30,856 (excluding fee received as a committee member); ·Annual fee for Audit and Risk Committee
member of R30,856; ·Annual fee for the chairman of Remuneration
and Nominations Committee and Social and Ethics Committee of R23,142 (excluding
fee received as a committee member); ·Annual fee for members of Remuneration
Committee and Social and Ethics Committee of R23,142 each; ·Daily fee of R23,142; ·Hourly rate of R3,086; ·Half-day fee for participating by telephone
in special board meetings of R11,571; and ·The Chairman of the board, Lead Independent Non-Executive
Director and other Non-Executive Directors to receive committee fees.   5332


---

The
  following table sets forth the compensation for our directors and prescribed
  officers for the year ended June 30, 2018Directors
  / Prescribed Officer
 Total remuneration paid during the year
 Short Term Incentives related to this
  cycle
 Long term Incentives paid during this
  cycle
 Total remuneration related to this cycleR'000
 R'000
 R'000
 R'000Executive
  directorsD J
  Pretorius
 6 104
 4 697
 -
 10 801A J
  Davel
 3 429
 2 639
 250
 6 3189 533
 7 336
 250
 17 119Non-executive
  directorsG C
  Campbell
 1 446
 -
 -
 1 446J Turk
 655
 -
 -
 655E A
  Jeneker
 805
 -
 -
 805J
  Holtzhausen
 718
 -
 -
 718T B V
  N Mnyango
 651
 -
 -
 6514 275
 -
 -
 4 275Prescribed
  officers (1)W J
  Schoeman
 3 308
 2 013
 250
 5 571R
  Masemene
 2 402
 808
 124
 3 3345 710
 2 821
 374
 8 905Total
 19 518
 10 157
 624
 30 299(1)The Companies Act, 2008 (Act 71 of
  2008), under section 30, requires the remuneration of prescribed officers, as
  defined in regulation 38 of Company Regulations 2008, to be disclosed with
  that of directors of the company. A person is a prescribed officer if they
  have general executive authority over the company, general responsibility for
  the financial management or management of legal affairs, general managerial
  authority over the operations of the company or directly or indirectly
  exercise or significantly influence the exercise of control over the general
  management and administration of the whole or a significant portion of the
  business and activities of the company.See
  also Item 6E. Share Ownership for details of share options held by directors.
 Compensation of key management  Refer toItem 18. ‘‘Financial
Statements – Note 18.2 – Related party transactions’’ for the total
compensation paid to key management (including executive and non-executive
directors as well as prescribed officers).  Short term incentives in respect of Executive Directors are paid
based upon performance against predetermined key performance indicators. Should
an Executive Director meet all the targets set in terms of such predetermined
key performance indicators, he will be entitled to a short term incentive of up
to 100% of his remuneration package, depending on his particular agreement.
Should an Executive Director not meet all the targets set in terms of the
predetermined key performance indicators, he will be entitled to a lesser bonus
as determined at the discretion of the Remuneration Committee.    5432


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Service Agreements  Service contracts negotiated with each executive and non-executive
director incorporate their terms and conditions of employment and are approved
by our Remuneration Committee.  The Company’s current executive directors, Mr. D.J. Pretorius and
Mr. A.J. Davel, entered into agreements of employment with us, on January 1,
2009 and January 1, 2015, respectively. These agreements regulated the
employment relationship with Messrs. D.J. Pretorius and A.J. Davel during the
year ended June 30, 2018.  On July 1, 2015 Mr. D.J. Pretorius entered into a new agreement of
employment for a period of 3 years and thereafter it continues indefinitely
until terminated by either party on not less than three months’ written notice.
Under the employment agreement effective up to June 30, 2018 Mr. D.J. Pretorius
receives from us a guaranteed remuneration package of R5.5 million per annum.
Mr. D.J. Pretorius was eligible under his employment agreement, for an
incentive bonus of up to 100% of his annual remuneration package in respect of
one bonus cycle per annum over the duration of his appointment, on condition
that DRDGOLD achieves certain key performance indicators. In addition, he is
eligible to participate in the long term incentive scheme and was awarded
2,323,009 phantom shares during November 2015.  Mr. A.J. Davel entered into an employment agreement effective from
January 1, 2015 for a period of 3 years and thereafter it continues
indefinitely until terminated by either party on not less than three months’
prior written notice. Mr. A.J. Davel receives from us a guaranteed remuneration
package of R3.1 million per annum. Mr. A.J. Davel is eligible under his
employment agreement, for a short term incentive of up to 100% of his annual
remuneration package in respect of one bonus cycle per annum over the duration
of his appointment, on condition that DRDGOLD achieves certain key performance
indicators. He is eligible to participate in the long term incentive scheme. He
was issued 205,207 phantom shares under the long term incentive scheme on his
joining DRDGOLD and 1,305,033 phantom shares during November 2015.  Messrs. G.C. Campbell and E.A. Jeneker each have
service agreements which run for fixed periods until October 31, 2019. Mr. J
Turk has a service agreement which runs until October 31, 2018. Mr. J.A
Holtzhausen has a service agreement which runs for a fixed period until April
25, 2018.Mrs. TVBN Mnyangohas a service
agreement which runs for a fixed period until November 30, 2018. After
expiration of the initial two year periods, the agreements continue
indefinitely until terminated by either party on not less than three months’
prior written notice.  The Company does not administer any pension,
retirement or other similar scheme in which the directors receive a benefit.  Each service agreement with our directors provides
for the provision of benefits to the director where the agreement is terminated
by us in the case of our executive officers, except where terminated as a
result of certain action on the part of the director, upon the director
reaching a certain age, or by the director upon the occurrence of a change of
control. A termination of a director's employment upon the occurrence of a
change of control is referred to as an “eligible termination.” Upon an eligible
termination, the director is entitled to receive a payment equal to at least
one year's salary or fees, but not more than three years' salary for Executive
Directors or two years’ fees for Non-Executive Directors, depending on the
period of time that the director has been employed.  6C. BOARD PRACTICES  Board of Directors  As at
September 30, 2018, the board of directors comprises two Executive Directors
(Mr. D.J. Pretorius and Mr. A.J. Davel), and five Non-Executive
Directors (Messrs. G.C. Campbell, J. Turk, E.A. Jeneker, J.A.
Holtzhausen and Mrs. TVBN Mnyango). The Non-Executive Directors are independent
under the New York Stock Exchange, or NYSE, requirements (as affirmatively
determined by the Board of Directors) and the South African King IV Report.  In accordance with the King IV Report on corporate governance, as
encompassed in the JSE Listings Requirements, and in accordance with the United
Kingdom Combined Code, the responsibilities of Chairman and Chief Executive
Officer are separate. Mr. G.C. Campbell is the Non-Executive Chairman, Mr. D.J.
Pretorius is the Chief Executive Officer and Mr. A.J Davel is the Chief
Financial Officer. The board has established a Remuneration and Nominations
committee, and it is our policy for details of a prospective candidate to be
distributed to all directors for formal consideration at a full meeting of the
board. A prospective candidate would be invited to attend a meeting and be
interviewed before any decision is taken. In compliance with the NYSE rules a
majority of independent directors will select or recommend director nominees.  The board’s main roles are to create value for shareholders, to
provide leadership of the Company, to approve the Company’s strategic
objectives and to ensure that the necessary financial and other resources are
made available to management to enable them to meet those objectives. The board
retains full and effective control over the Company, meeting on a quarterly
basis with additional ad hoc meetings being arranged when necessary, to review
strategy and planning and operational and financial performance. The board
further authorizes acquisitions and disposals, major capital expenditure,
stakeholder communication and other material matters reserved for its
consideration and decision under its terms of reference. The board also
approves the annual budgets for the various operational units.  The board is responsible for monitoring the activities of
executive management within the company and ensuring that decisions on material
matters are referred to the board. The board approves all the terms of
reference for the various subcommittees of the board, including special
committees tasked to deal with specific issues. Only the executive directors
are involved with the day-to-day management of the Company.  5532


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To assist new directors, an induction program has been established
by the Company, which includes background materials, meetings with senior
management, presentations by the Company’s advisors and site visits. The
directors are assessed annually, both individually and as a board, as part of
an evaluation process, which is driven by an independent consultant. In
addition, the Remuneration and Nominations Committees formally evaluate the
executive directors on an annual basis, based on objective criteria.  All directors, in accordance with the Company’s MOI, are subject
to retirement by rotation and re-election by shareholders. In addition, all
directors are subject to election by shareholders at the first annual general
meeting following their appointment by directors. The appointment of new
directors is approved by the board as a whole. The names of the directors
submitted for re-election are accompanied by sufficient biographical details in
the notice of the forthcoming annual general meeting to enable shareholders to
make an informed decision in respect of their re-election.  All directors have access to the advice and services of the
Company Secretary, who is responsible to the board for ensuring compliance with
procedures and regulations of a statutory nature. Directors are entitled to
seek independent professional advice concerning the affairs of the Company at
the Company’s expense, should they believe that course of action would be in
the best interest of the Company.  Board meetings are held quarterly in South Africa and abroad. The
structure and timing of the Company’s board meetings, which are scheduled over
two days, allows adequate time for the Non-Executive Directors to interact
without the presence of the Executive Directors. The board meetings include the
meeting of the Audit and Risk Committee, Remuneration and Nominations Committee
and Social and Ethics Committee which act as subcommittees to the board. Each
subcommittee is chaired by one of the Independent Non-Executive Directors, each
of which provides a formal report back to the board. Each subcommittee meets
for approximately half a day. Certain senior members of staff are invited to
attend the subcommittee meetings.  The board sets the standards and values of the Company and much of
this has been embodied in the Company’s Code of Conduct, which is available on
our website at www.drdgold.com. The Code of Conduct applies to all directors,
officers and employees, including the principal executive, financial and
accounting officers, in accordance with Section 406 of the US Sarbanes-Oxley
Act of 2002, the related US securities laws and the NYSE rules. The Code
contains provisions for employees to report violations of Company policy or any
applicable law, rule or regulation, including US securities laws.  A description of the significant ways in which our corporate
governance practices differ from practices followed by U.S. companies listed on
the NYSE can be found in Item 16G. Corporate Governance.  Directors' Terms of Service  The following table shows the date of appointment,
expiration of term and number of years of service with us of each of the
directors as at June 30, 2018:  Director
 Title
 Year
  firstappointed
 Term of currentoffice
 Unexpired term ofcurrentofficeD.J. Pretorius
 Chief
  Executive Officer
 2008
 3 years
 * 12 monthsA.J. Davel
 Chief
  Financial Officer
 2015
 3 years
 * 12 monthsG.C. Campbell
 Non-Executive
  Director
 2002
 2 years
 16 monthsE.A. Jeneker
 Non-Executive
  Director
 2007
 2 years
 16 monthsJ. Turk
 Non-Executive
  Director
 2004
 1 year
 4 monthsJ. Holtzhausen
 Non-Executive
  Director
 2014
 2 years
 22 monthsT.V.B.N. Mnyango
 Non-Executive
  Director
 2016
 2 years
 5 months*
  Renewal of the term of office was deferred to the October 2018 board meeting
  at which the contracts of D.J. Pretorius and A.J. Davel were extended to June
  30, 2019.
 Executive Committee  As at June 30, 2018, the Executive Committee
consisted of Mr. D.J. Pretorius (Chairman), Mr. A.J. Davel, Mr. W.J. Schoeman
and Ms. R. Masemene.  The Executive Committee meets on a weekly
basis to review current operations, develop strategy and policy proposals for
consideration by the board of directors. Members of the Executive Committee,
who are unable to attend the meetings in person, are able to participate via
teleconference facilities, to allow participation in the discussion and
conclusions reached.  Board Committees  The board has established a number of standing committees to
enable it to properly discharge its duties and responsibilities and to
effectively fulfill its decision-making process. Each committee acts within
written terms of reference which have been approved by the board and under which
specific functions of the board are delegated. The terms of reference for all
committees can be obtained by application to the Company Secretary at the
Company’s registered office. Each committee has defined purposes, membership
requirements, duties and reporting procedures. Minutes of the meetings of these
committees are circulated to the members of the committees and made available
to the board. 5632


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Remuneration of Non-Executive Directors
for their services on the committees concerned is determined by the board. The
committees are subject to regular evaluation by the board with respect to their
performance and effectiveness. The following information reflects the
composition and activities of these committees.  Committees of the Board of Directors  Remuneration and Nominations Committee  As at June 30, 2018 theRemuneration and Nominations Committeeconsisted ofG C Campbell (Chairman: nominations), E A Jeneker
(Chairman: remuneration), J A Holtzhausen and J Turk.  In August 2014, the Remuneration Committee and the Nominations
Committee were combined into the Remuneration and Nominations Committee. The
committee meets on anad hocbasis. All members of this committee are
independent NEDs. It is chaired by the board chairman when matters relating to
nominations are discussed and by an independent NED when matters relating to
remuneration are discussed.  The primary remuneration role of the committee is to execute the
following functions: ·Ensure the establishment of a formal process
for the appointment of directors; ·ensure that inexperienced directors are
developed through a mentorship programme; ·ensure that directors receive regular
briefings on changes in risks, laws and the appropriate contribution; ·drive an annual process to evaluate the
board, board committees and individual directors; ·ensure that formal succession plans for the
board, chief executive officer and senior management appointments are developed
and implemented.  The committee has an obligation to offer competitive packages that
will attract and retain executives of the highest caliber and encourage and
reward superior performance. Industry surveys are provided for comparative
purposes, and to assist the committee
in the formulation of remuneration policies that are market related.  The key nominations responsibilities of the committee include the
following: ·make recommendations to the board on the
appointment of new directors; ·make recommendations on the composition of
the board and the balance between executive and NEDs appointed to the board; ·review board structure, size and composition
on a regular basis; ·make recommendations on directors eligible to
retire by rotation; and ·apply the principles of good corporate
governance and best practice in respect of nominations matters.  Audit and Risk Committee  In August 2014, the board combined the Audit Committee and the
Risk Committee to form the Audit and Risk Committee.  As at June 30, 2018 theAudit and Risk Committeeconsisted ofJ A Holtzhausen (Chairman), J Turk and E A Jeneker.  All members of the Audit and Risk Committee are independent
according to the definition set out in the NYSE Rules. See Item 16G. Corporate
Governance. The committee’s charter deals with all the aspects relating to its
functioning.  The
Audit and Risk Committee charter was revised in April 2017 and sets out the
committee’s terms of reference. Responsibilities
include: ·External auditors, audit process and
financial reporting; ·Internal audit; ·integrated reporting and assurance model; ·oversee the development and annual review of
a policy and plan for risk management; ·ensure that risk management assessments are
performed on a continuous basis; ·ensure that reporting on risk management
assessment is complete, timely, accurate and accessible; ·ensure that frameworks and methodologies are
implemented to increase the possibility of anticipating unpredictable risks; ·ensure that continuous risk monitoring by
management takes place.  The Audit and Risk Committee meets each quarter with the external
auditors, the company’s manager: risk and internal audit, and the CFO. The
committee reviews the audit plans of the internal auditors to ascertain the
extent to which the scope of the audits can be relied upon to detect weaknesses
in internal controls. It also reviews the annual and interim financial
statements prior to their approval by the board.  The committee is responsible for making recommendations to
appoint, reappoint or remove the external auditors, and the designated external
audit partner as well as determining their remuneration and terms of
engagement. In accordance with its policy, the committee preapproves all audit
and non-audit services provided by the external auditors. KPMG Inc. was
reappointed by shareholders at the2017AGM to perform DRDGOLD’s external audit function.  5732


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The internal audit function is performed in-house, with the assistance
of Pro-Optima Audit Services Proprietary Limited. Internal audits are performed
at all DRDGOLD operating units and are aimed at reviewing, evaluating and
improving the effectiveness of risk management, internal controls and corporate
governance processes.  Significant deficiencies, material weaknesses, instances of
non-compliance and exposure to high risk and development needs are brought to
the attention of operational management for resolution. The committee members
have access to all the records of the internal audit team.  DRDGOLD’s internal and external auditors have unrestricted access
to the chairman of the Audit and Risk Committee and, where necessary, to the
chairman of the board and the CEO. All significant findings arising from audit
procedures are brought to the attention of the committee and, if necessary, to
the board.  Section 404 of SOx stipulates that management is required to
assess the effectiveness of the internal controls surrounding the financial
reporting process. The results of this assessment are reported in the form of a
management attestation report that is filed with the SEC as part of the Form 20-F.
Additionally, DRDGOLD’s external auditors are required to express an opinion on
the effectiveness of internal controls over financial reporting, which is also
contained in the Company’s Form 20-F.  An important aspect of risk management is the transfer of risk to
third parties to protect the company from disaster. DRDGOLD’s major assets and
potential business interruption and liability claims are therefore covered by
the group insurance policy, which encompasses all the operations. Most of these
policies are held through insurance companies operating in the United Kingdom,
Europe and South Africa. The various risk-management initiatives undertaken
within the group as well as the strategy to reduce costs without compromising
cover have been successful and resulted in substantial insurance cost savings
for the Group.  Social and Ethics Committee  As at June 30,2018, the
Social and Ethics Committee consisted of Mr. E.A. Jeneker (Chairman), Mr. D.J.
Pretorius and Mrs. TVBN Mnyango. The Social and Ethics Committee was established to enable DRDGOLD
to achieve the triple bottom line recommended by local guidance on best
practice in corporate governance and to reach the empowerment goals to which the
Company is committed. Its terms of reference were approved by the board in
April 2017 and its objectives are to: ·promote transformation within the Company and
economic empowerment of previously disadvantaged communities, particularly
within the areas where the company conducts business; ·strive towards achieving equality at all
levels of the company, as required by the South African constitution and other
legislation, taking into account the demographics of the country; and ·conduct business in a manner that is
conducive to the attainment of internationally acceptable environmental and
sustainability standards.  The following terms of reference were approved by the board to
enable the committee to function effectively. These are to make recommendations
to the board: ·to monitor the company’s activities with
regard to the 10 principles set out in the United Nations Global Compact
Principles and the OECD recommendations regarding Corruption, the Employment
Equity Act and the Broad Based Black Economic Empowerment Act; ·records of sponsorship, donations and
charitable giving; ·the environment, health and public safety,
including the impact of the company’s activities and of its products or
services; ·labour and employment ·review and recommend the company’s code of
ethics; ·review and recommend any corporate
citizenship policies; ·review significant cases of employee
conflicts of interests, misconduct or fraud, or any other unethical activity by
employees or the Company  6D. EMPLOYEES  Employees  The
total number of employees at June 30, 2018, of  2 304 comprises  1 426
specialized service providers and  878 employees who are directly employed by
us and our subsidiary companies. As of September 30, 2018, we had 2,463 employees
(including 1,424 contract employees). The increase in the number of employees
was due to the addition of 172 employees resulting from the acquisition of the
WRTRP Assets effective on July 31, 2018.  All of our employees are based at our operations
that operate exclusively in South Africa. 5832


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Labor
Relations  As at June 30, 2018, approximately
91% of our South African employees are members of trade unions or employee
associations. South Africa's labor relations environment remains a platform for
social reform. The National Union of Mineworkers, or NUM, one of the main South
African mining industry unions, is influential in the tripartite alliance
between the ruling African National Congress, the Congress of South African
Trade Unions, or COSATU, and the South African Communist Party as it is the
biggest affiliate of COSATU. The relationship between management and labor
unions remains cordial. The organized labor coordinating forum meets regularly
to discuss matters pertinent to both parties.  On April 9, 2018, Ergo signed
a one year extension of the 2016/18 Wage Agreement with the Majority Unions for
a wage increaseranging from 7-10% per annum depending on worker job
category, averaging 8.2% per annum across our workforce. The next round of wages and conditions of employment
negotiations will commence in June 2019.  The Company places a great emphasis on its
Corporate Social Responsibility by staying actively involved in appropriate
projects that give effect to the ideals of the Mining Charter and good
corporate governance. During the last 5 calendar years (2013-2017) the Company
has spent in excess of R62 million in fulfilling its Social & Labour Plan
which is a statutory requirement of the Mineral & Petroleum Resources
Development Act.  We recognize the need for transformation and have
put systems and structures in place to address this at both management and
board level.  Safety statistics  Due to the importance of our
labor force, we continuously strive to create a safe and healthy working
environment. The following are our 2018 overall safety statistics for our
operations:  (Per million man hours)
 Year ended June 30,2018
 2017Lost time injury frequency rate (LTIFR)(1)
 2.92
 2.91Reportable incidence(1)
 1.55
 1.53Fatalities
 -
 1(1)
  Calculated as follows: actual number of instances divided by the total number
  of man hours worked multiplied by one million.
 6E. SHARE OWNERSHIP  **To the best of our knowledge, we believe that
our ordinary shares held by executive officers, in aggregate, do not exceed one
percent of the Company’s issued ordinary share capital. For details of share
ownership of directors and prescribed officers see Item 7A. Major Shareholders.  As of June 30, 2018, directors and prescribed
officers do not hold any options to purchase ordinary shares.  *Closed
periods apply to share trading by directors and other employees, whenever
certain employees of the Company become or could potentially become aware of
material price sensitive information, such as information relating to an
acquisition, bi-annual results etc., which is not in the public domain. When
these employees have access to this information an embargo is placed on share
trading for those individuals concerned. The embargo need not involve the
entire Company in the case of an acquisition and may only apply to the board of
directors, executive committee, and the financial and new business teams, but
in the case of interim and year-end results the closed-period is group-wide.*  DRDGOLD Phantom Share Scheme (before amendment)  The phantom share scheme is operated as an incentive tool for our
executive directors, excluding the CEO, and senior employees whose skills and
experience are recognized as being essential to the Company’s performance. The
scheme is cash settled. In terms of the phantom share scheme rules, 50% of the
phantom shares granted will be valued based on the Group meeting certain
pre-determined performance criteria and the remaining 50% to defined retention
periods. The maximum incentive pay-out per annum to any single employee may not
exceed 75% of that employee’s gross remuneration package. The participants in
the scheme are fully taxed at their marginal rate on any gains realized on the
exercise of their phantom shares.  The phantom share granted has a zero strike price, however the
number of phantom shares granted by the Remuneration Committee is determined by
the price in respect of each share which is the subject of the phantom share, the
volume weighted average price of a share on the JSE for the seven days on which
the JSE is open for trading, preceding the day on which the employee is granted
a phantom share. The allocation date will be the date when the directors
approve allocation of the phantom shares. Each phantom share remains in force
until the date of vesting, subject to the terms of the scheme rules. Phantom
shares granted under the phantom share scheme vest primarily according the
following schedule over a maximum of a three year period:  5932


---

Percentage vested in each
  period grant:
 
 Period
  after the original date of grantof the
  option:Performance
  criteria
 Retention
  criteria33%
 0%
 one
  year33%
 50%
 two
  years33%
 50%
 three
  years
 The phantom shares granted before the November 2015 amendment
described below were not affected by the said amendment and continued to vest
under the original terms of the grant. The last tranche of these phantom shares
vested and were paid during fiscal year 2018.  DRDGOLD Phantom Share Scheme (Amended November 2015)  During fiscal year 2017, DRDGOLD’s REMCO approved a revised
long-term incentive scheme. On November 4, 2015, REMCO approved an allocation
of 20,527,978 phantom shares which is driven by share price performance and
individual performance, and is based on phantom share allocations. The vesting
of any shares allocated is staggered over a five-year period commencing in the
third year after the allocation is granted in line with King recommendations.
The objectives of the revised scheme are to drive the longer-term strategies of
DRDGOLD, to align participants’ interests with shareholders’ interest, to
incentivise and motivate participants, to attract and retain scarce human
resources and to reward superior performance by the Company and participants.
REMCO has the authority to amend in part or in its entirety or withdraw the
long-term incentive scheme at any time.  No phantom shares were granted during fiscal year 2018 or 2017. 20 527 978
phantom shares were granted during fiscal year 2016. 20 189 467
phantom shares were outstanding on June 30, 2018 (2017:
21 144 534).   6032


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ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS  7A. MAJOR SHAREHOLDERS  As of September 30, 2018, our issued capital consisted of: ·696,429,767ordinary shares of no par value; and ·5,000,000 cumulative preference shares.  To our knowledge, as of 30 June 2018, we were not
directly or indirectly owned or controlled by another corporation or any person
or foreign government.  On July 31, 2018, 265 million ordinary shares were
issued to Sibanye-Stillwater as settlement of the purchase consideration for
the acquisition of the WRTRP Assets. As part of this acquisition, Sibanye-Stillwater
was granted an option to subscribe for further shares to achieve a 50.1%
shareholding for a period of 2 years from the effective date of the acquisition
at a 10% discount to the prevailing market value.  Other than the above there are no arrangements, the operation of
which may at a subsequent date result in a change in control of us.  Based on information available to us, as of
September 30, 2018: ·there were 5,758 record holders of our
ordinary shares in South Africa, who held 461,189,130 or approximately 66.2% of
our ordinary shares; ·there was one record holder of our cumulative
preference shares in South Africa, who held 5,000,000 ordinary shares or 100%
of our cumulative preference shares; ·there were 22 US record holders of our
ordinary shares, who held approximately 20,070,838 ordinary shares or
approximately 2.88% of our ordinary shares excluding those shares held as part
of our ADR program; and ·there were 720 registered holders of our ADRs
in the United States, who held approximately 216,938,320 shares (21,693,832
ADRs) or approximately 31.2% of our ordinary shares.  The following table sets forth information
regarding the beneficial ownership of our ordinary shares as of September 30,
2018, by:  ·each of our directors and prescribed
officers; and ·any person whom the directors are aware of as
at September 30, 2018 who is interested directly or indirectly in 1% or more of
our ordinary shares. There was significant change in the percentage ownership
of the major shareholders over the preceding three years.  Shares Beneficially ownedHolder
 Number
 Percent of outstanding ordinary
  sharesDirectors/prescribed officersD.J. Pretorius
 690 188
 *A.J. Davel
 100 000
 *J. Turk
 243,000
 *G.C. Campbell
 200,000
 *OtherSibanye-Stillwater
 265 000 000
 38.05%Ruffer, LLP
 49 894 680
 7.16%Van Eck Associates Corporation
 32 521 120
 4.67%Khumo Gold SPV Proprietary Limited
 16 326 007
 2.34%Renaissance Technologies, LLC
 12 101 130
 1.74%*    
  Indicates share ownership of less than 1% of our outstanding ordinary shares.
 As of September 30, 2018, we are not aware of anyone owning 5% or
more of our ordinary shares other than described above. No shareholder has
voting rights which differ from the voting rights of any other shareholder.    6132


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Cumulative Preference
Shares  Randgold and Exploration Company Limited, or
Randgold, owns 5,000,000 (100%) of our cumulative preference shares. Randgold's
registered address is Suite 25, Katherine & West Building, Corner of
Katherine and West Streets, Sandown, Sandton, 2196.  The holders of cumulative preference shares do not
have voting rights unless any preference dividend is in arrears for more than
six months. The terms of issue of the cumulative preference shares are that
they carry the right, in priority to the Company's ordinary shares, to receive
a dividend equal to 3% of the gross future revenue generated by the exploitation
or the disposal of the Argonaut mineral rights acquired from Randgold in
September 1997. Additionally, holders of cumulative preference shares may
vote on resolutions which adversely affect their interests and on the disposal
of all, or substantially all, of our assets or mineral rights. There is
currently no active trading market for our cumulative preference shares.
Holders of cumulative preference shares will only obtain their potential voting
rights once the Argonaut Project becomes an operational gold mine, and
dividends accrue to them. The prospecting rights have since expired and the
Argonaut Project terminated.The development of the project
is not expected to materialise and therefore no dividend is expected to be
paid.  7B. RELATED PARTY TRANSACTIONS  Remuneration paid
to key management is disclosed inItem
18. ‘‘Financial Statements - Note 18.2 – Key management personnel
remuneration’’  7C. INTERESTS OF EXPERTS AND COUNSEL  Not applicable.  ITEM 8. FINANCIAL INFORMATION  8A. CONSOLIDATED STATEMENTS AND OTHER
FINANCIAL INFORMATION  1.Please refer to Item 18. Financial Statements.  2.Please refer to Item 18. Financial
Statements.  3.Please refer to Item 18. Financial Statements.  4.The last year of audited financial statements
is not older than 15 months.  5.Not applicable.  6.Not applicable.  7.See under Item 4D. Property, plant and
equipment—Ongoing Legal Proceedings.  8.Please see Item 10B. Memorandum of
Incorporation.   8B. SIGNIFICANT CHANGES  Significant
changes that have occurred since June 30, 2018, the date of the last audited
financial statements included in this Annual Report, are discussed in the
relevant notes to the financial statements under Item 18. Financial Statements.   6232


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ITEM 9. THE OFFER AND LISTING  9A. OFFER AND LISTING DETAILS  The following tables set forth, for the periods indicated, the
high and low market sales prices and average daily trading volumes of our
ordinary shares on the JSE and ADSs on the New York Stock Exchange.   Price Per
 Price Per
 Average DailyOrdinary Share
 ADS
 TradingR
 $
 VolumeYear Ended
 High
 
 High
 Low
 Ordinary
 ADSsLow
 ShareJune 30, 2014
 6.64
 2.45
 6.47
 2.39
 709 433
 117 380June 30, 2015
 4.03
 1.79
 3.65
 1.35
 510 455
 149 298June 30, 2016
 9.49
 1.49
 6.05
 1.10
 1 378 955
 273 317June 30, 2017
 12.62
 3.70
 9.10
 2.84
 1 145 751
 513 707June 30, 2018
 5.52
 2.69
 4.11
 2.23
 392 848
 98 559
 Price Per
 Price Per
 Average DailyOrdinary Share
 ADS
 TradingR
 $
 VolumeQuarter Ended
 High
 
 High
 Low
 Ordinary
 ADSsLow
 ShareQ1 July – September 2016
 12.62
 6.50
 9.10
 4.74
 1 343 395
 685 864Q2 October – December 2016
 7.51
 5.25
 5.61
 3.70
 1 194 444
 583 354Q3 January – March 2017
 8.96
 5.76
 6.67
 4.59
 1 406 611
 412 828Q4 April – June 2017
 7.14
 3.70
 5.23
 2.84
 610 710
 368 449Q1 July – September 2017
 5.44
 3.90
 4.11
 2.91
 458 841
 160 321Q2 October – December 2017
 5.52
 3.59
 4.00
 2.90
 393 487
 86 269Q3 January – March 2018
 4.20
 3.00
 3.38
 2.65
 388 638
 74 887Q4 April – June 2018
 4.10
 2.69
 2.23
 2.23
 329 352
 72 421Q1 July – September 2018
 3.75
 2.66
 2.68
 1.76
 207 279
 97 516
 Price Per
 Price Per
 Average DailyOrdinary Share
 ADS
 TradingR
 $
 VolumeMonth Ended
 High
 
 High
 Low
 Ordinary
 ADSsLow
 ShareApril 30, 2018
 3.50
 2.69
 2.87
 2.25
 400 420
 90 520May 31, 2018
 3.60
 2.88
 2.79
 2.23
 291 835
 62 117June 30, 2018
 4.10
 3.27
 2.95
 2.50
 304 357
 65 116July 31, 2018
 3.75
 3.00
 2.68
 2.33
 108 504
 38 405August 31, 2018
 3.67
 2.80
 2.57
 2.02
 205 826
 53 370September 30, 2018
 3.40
 2.66
 2.52
 1.76
 323 332
 216 289
  The cumulative preference shares are not
traded on any exchange. There have been no trading
suspensions with respect to our ordinary shares on the JSE during the past
three years ended June 30, 2018, nor have there been any trading suspensions
with respect to our ADRs on the New York Stock Exchange since our listing on
that market.  6332


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9B.
PLAN OF DISTRIBUTION  Not
applicable.  9C. MARKETS  Nature of Trading Markets  The principal trading market for our equity securities is the JSE
(symbol: DRD) and our ADSs that trade on the New York Stock Exchange (symbol:
DRD). The ADRs are issued by The Bank of New York Mellon, as depositary. Each
ADR represents one ADS and each ADS represents ten of our ordinary shares.
Until July 23, 2007, each ADS represented one of our ordinary shares.  9D. SELLING SHAREHOLDERS  Not
applicable. 9E. DILUTION  Not
applicable.  9F. EXPENSES OF THE ISSUE  Not applicable.  ITEM 10. ADDITIONAL INFORMATION  10A. SHARE CAPITAL  Not applicable.  10B. MEMORANDUM OF
INCORPORATION  As
of June 30, 2018, we had authorized for issuance 1,500,000,000 ordinary shares
of no par value (as of September 30, 2018: 1,500,000,000), and 5,000,000
cumulative preference shares of R0.10 par value (as of September 30, 2018:
5,000,000). On this date, we had issued 431,429,767 ordinary shares (as of
September 30, 2018: 696,429,767) and 5,000,000 cumulative preference shares (as
of September 30, 2018: 5,000,000).  Set out below are brief summaries of certain
provisions of our Memorandum of Incorporation, or our MOI, the Companies Act of
South Africa and the JSE Listings Requirements, all as in effect on September
30, 2018. The summary does not purport to be complete and is subject to and
qualified in its entirety by reference to the full text of the MOI, the
Companies Act, and the JSE Listings Requirements.  We are registered under the Companies Act of South
Africa under registration number 1895/000926/06. As set forth in our Memorandum
of Incorporation, the main object and business of our company is mining and
exploration for gold and other minerals.  Borrowing Powers  Our directors may from time to time borrow for the
purposes of the company, such sums as they think fit and secure the payment or
repayment of any such sums, or any other sum, as they think fit, whether by the
creation and issue of securities, mortgage or charge upon all or any of the
property or assets of the company. The directors shall procure that the
aggregate principal amount at any one time outstanding in respect of monies so
borrowed or raised by the company and all the subsidiaries for the time being
of the company shall not exceed the aggregate amount at that time authorized to
be borrowed or secured by the company or the subsidiaries for the time being of
the company (as the case may be).  Share Ownership Requirements  Our directors are not required to hold any shares
to qualify or be appointed as a director.    6432


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Voting by Directors  A director may authorize any other director to vote
for him at any meeting at which neither he nor his alternate director appointed
by him is present. Any director so authorized shall, in addition to his own
vote, have a vote for each director by whom he is authorized.  The quorum necessary for the transaction of the
business of the directors is a majority of the directors present at a meeting
before a vote may be called at any meeting of directors.  Directors are required to notify our board of
directors of interests in companies and contracts. If a director has a personal
financial interest in respect of a matter to be considered at a meeting of the
board he or she must disclose the interest and its nature, any material
information relating to the matter and thereafter leave the meeting immediately
after making the disclosure. Such director must not take part in consideration
of the matter. He is not to be regarded as being present for the purpose of
determining whether a resolution has sufficient support to be adopted.  The King Report on Corporate Governance for South
Africa (King IV Report) which came into effect on April 1, 2017, sets out
guidelines to promote the highest standards of corporate governance among South
African companies. The board of directors believes that our business should be
conducted according to the highest legal and ethical standards. In accordance
with the board practice, all remuneration of executive directors is approved by
the Remuneration and Nominations Committee, and the shareholders approve
remuneration of non-executive directors.  DRDGOLD commits itself to observing the provision
of the King IV Report and enforcing these to the extent possible within the
context of the report’s ‘apply and explain’ principle.  Under South African common law, directors are
required to comply with certain fiduciary duties to the company and to exercise
proper care and skill in discharging their responsibilities. These common law
duties have now been codified by the Companies Act.  Age Restrictions  There is no age limit for directors.  Election of Directors  Each director shall be appointed by election by
way of an ordinary resolution of shareholders at a general or annual meeting of
company (“elected director (s)”) and no appointment of a director by way of a
written circulated shareholders resolution in terms of section 60 of the
Companies Act shall be competent.  One third of our directors, on a rotating basis,
are subject to re-election at each annual general shareholder’s meeting.
Retiring directors usually make themselves available for re-election. An amendment
to the MOI which also subjects executive directors to re-election by rotation
was approved by shareholders at the 2014 annual general meeting.  General Meetings  On the request of any shareholder or shareholders
holding not less than 10 percent of our share capital which carries the right
of voting at general meetings, we shall issue a notice to shareholders
convening a general meeting for a date not less than 15 days from the date
of the notice. Directors may convene general meetings at any time.  Our annual general meeting and a meeting of our
shareholders for the purpose of passing a special resolution may be called by
giving 15 days advance written notice of that meeting. For any other
general meeting of our shareholders, 15 days advance written notice is
required.  Our MOI provides that if at a meeting convened upon
request by our shareholders, a quorum is not present within fifteen minutes
after the time selected for the meeting, such meeting shall be postponed for
one week. However the chairman has the discretion to extend the fifteen minutes
for a reasonable period on certain grounds. The necessary quorum is three
members present with sufficient voting powers in person or by proxy to exercise
in aggregate 25% of the voting rights.  Voting Rights  The holders of our ordinary shares are generally
entitled to vote at general meetings and on a show of hands have one vote per
person and on a poll have one vote for every share held. The holders of our
cumulative preference shares are not entitled to vote at a general meeting
unless any preference dividend is in arrears for more than six months at
the date on which the notice convening the general meeting is posted to the
shareholders. Additionally, holders of cumulative preference shares may vote on
resolutions which adversely affect their interests and on resolutions regarding
the disposal of all or substantially all of our assets or mineral rights. When
entitled to vote, holders of our cumulative preference shares are entitled to
one vote per person on a show of hands and that portion of the total votes
which the aggregate amount of the nominal value of the shares held by the
relevant shareholder bears to the aggregate amount of the nominal value of all
shares issued by us.    6532


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Dividends  We may, in a general meeting,
or our directors may, from time to time, declare a dividend to be paid to the
shareholders in proportion to the number of shares they each hold. No dividend
shall be declared except out of our profits. Dividends may be declared either
free or subject to the deduction of income tax or duty in respect of which we
may be charged. Holders of ordinary shares are entitled to receive dividends as
and when declared by the directors.  Ownership Limitations  There are no limitations imposed by our MOI or South
African law on the rights of shareholders to hold or vote on our ordinary
shares or securities convertible into our ordinary shares.  Winding-up  If we are wound-up, then the assets remaining after
payment of all of our debts and liabilities, including the costs of
liquidation, shall be applied to repay to the shareholders the amount paid up
on our issued capital and thereafter the balance shall be distributed to the
shareholders in proportion to their respective shareholdings. On a winding up,
our cumulative preference shares rank, in regard to all arrears of preference
dividends, prior to the holders of ordinary shares. As of September 30, 2018,
no such dividends have been declared. Except for the preference dividend and as
described in this Item our cumulative preference shares are not entitled to any
other participation in the distribution of our surplus assets on winding-up.  Reduction of Capital  We may, by special resolution,
reduce the share capital authorized by our MOI, or reduce our issued share
capital including, without limitation, any stated capital, capital redemption
reserve fund and share premium account by making distributions and buying back
our shares.  Amendment of theMOI  Our MOI may be altered by the
passing of a special resolution or in compliance with a court order. The
Company may also amend the MOI by increasing or decreasing the number of
authorized shares, classifying or reclassifying shares, or determining the terms
of shares in a class. A special resolution is passed when the shareholders
holding at least 25% of the total votes of all the members entitled to vote are
present or represented by proxy at a meeting and, if the resolution was passed
on a show of hands, at least 75% of those shareholders voted in favor of the
resolution and, if a poll was demanded, at least 75% of the total votes to
which those shareholders are entitled were cast in favor of the resolution. An
amendment to the MOI to increase the number of authorized shares was approved
by shareholders at the 2018 general meeting.  Consent of the Holders of Cumulative
Preference Shares  The rights and conditions attaching to the
cumulative preference shares may not be cancelled, varied or added, nor may we
issue shares ranking, regarding rights to dividends or on winding up, in
priority to or equal with our cumulative preference shares, or dispose of all
or part of the Argonaut mineral rights without the consent in writing of the
registered holders of our cumulative preference shares or the prior sanction of
a resolution passed at a separate class meeting of the holders of our
cumulative preference shares.  Distributions  We are authorized to make payments in cash or in
specie to our shareholders in accordance with the provisions of the Companies
Act and other consents required by law from time to time. We may, for example,
in a general meeting, upon recommendation of our directors, resolve that any
surplus funds representing capital profits arising from the sale of any capital
assets and not required for the payment of any fixed preferential dividend, be
distributed among our ordinary shareholders. However, no such profit shall be
distributed unless we have sufficient other assets to satisfy our liabilities
and to cover our paid up share capital. We also need to consider the solvency
and liquidity requirements stated in the Companies Act of South Africa.  Directors’ power to vote compensation to
themselves  The remuneration of non-executive directors may not
exceed in aggregate in any financial year the amount fixed by the Company in
general meeting. The Companies Act requires that remuneration to non-executive
directors may be paid only in accordance with a special resolution approved by
shareholders within the previous two years.  Time limit for dividend entitlement  All unclaimed monies that are due to any
shareholder/s shall be held by the company in trust for an indefinite period
until lawfully claimed by such shareholder/s, subject to the Prescription Act,
1968 as amended or any other law which governs the law of prescription.  Staggered director elections & cumulative
voting  At each annual general meeting of the Company
one-third of the directors shall retire and be eligible for re-election. No
provision is made for cumulative voting.  6632


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Sinking fund
provisions and liability to further capital calls  There are no sinking fund provisions in the MOI
attaching to any class of the company shares, and the company does not subject
shareholders to liability to further capital calls.  Provision that would delay/prevent change of
control  The Companies Act provides that companies which
propose to merge or amalgamate must enter into a written agreement setting out
the terms thereof. They must prove that upon implementation of the amalgamation
or merger each will satisfy the solvency and liquidity test. Companies involved
in disposals, amalgamations or mergers, or schemes of arrangement must obtain a
compliance certificate from the Takeover Regulation Panel, pass special
resolutions and in some instances they must obtain an independent expert
report.  10C. MATERIAL
CONTRACTS Acquisition of FWGR (WRTRP Assets) from
Sibanye-Stillwater Sibanye-Stillwater Exchange Agreement On November 22, 2017, Sibanye-Stillwater, WRTRP Proprietary
Limited and the Company entered into the Sibanye-Stillwater Exchange Agreement.
Under the Sibanye-Stillwater Exchange Agreement, Sibanye-Stillwater agreed to
dispose certain gold surface processing assets and tailing storage facilities
that include Driefontein 3 and 5, Kloof 1, Venterspost North and South,
Libanon, Driefontein 4, Driefontein 2 plant, Driefontein 3 plant, WRTRP pilot
plant, and land required for the future development of a central processing
plant, regional tailings storage facility and return water dam (together, the
“WRTRP Assets”) to WRTRP Proprietary Limited in exchange for the issuance of
999 shares of WRTRP Proprietary Limited shares (comprising the entire share
capital of WRTRP Proprietary Limited) to Sibanye-Stillwater, subject to certain
limitations that include the consummation of certain agreements such as the DRD
Exchange Agreement, DRD Guarantee and DRD Option Agreement, among others. DRD Exchange Agreement Additionally, on November 22, 2017, pursuant to the
Sibanye-Stillwater Exchange Agreement, the Company and Sibanye-Stillwater
entered into the DRD Exchange Agreement, under which Sibanye-Stillwater agreed
to transfer all of the shares of WRTRP Proprietary Limited to the Company in
exchange for 265,000,000 ordinary shares of the Company, which represents
38.05% of our ordinary shares in issue (including any of our ordinary shares
held as treasury shares). Adirector
nominated by Sibanye‐Stillwater will be appointed as a
non-executive director of the Board subject to the terms of DRDGOLD’s MOI and
shareholders’ approval. DRD Guarantee In connection with the Sibanye-Stillwater Agreement and the DRD
Exchange Agreement, on November 22, 2017, the Company issued a guarantee to and
in favor of Sibanye-Stillwater. Under the DRD Guarantee, the Company
irrevocably and unconditionally guaranteed and agreed to: (i) undertake as a
principal and an independent obligation to and in favor of Sibanye-Stillwater
the due, punctual and full payment and performance which WRTRP Proprietary
Limited has, or may from time to time have, to Sibanye-Stillwater in terms of
any agreements to give effect to the transactions contemplated by the DRD
Exchange Agreement (the “Guaranteed Obligation”); (ii) undertake that whenever
WRTRP Proprietary Limited does not pay any Guaranteed Obligation when due, the
Company shall, immediately on demand, pay that amount as if it was the
principal obligor; (iii) undertake that whenever WRTRP Proprietary Limited does
not perform punctually any Guarantee Obligation, it shall, immediately on
demand, perform such obligation as if it was the principal obligor; (iv)
indemnify (as a separate and primary obligation) Sibanye-Stillwater immediately
on demand against any and all losses, liabilities, damages, costs or expenses
(but excluding any indirect, special, consequential or incidental loss or
damage) suffered by Sibanye-Stillwater if any indebtedness, payment obligation
or other obligation guaranteed by the Company under certain enumerated events;
and (v) undertake that if any Guaranteed Obligation is or becomes
unenforceable, invalid or illegal, the Company shall, as an independent and
primary obligation, indemnify Sibanye-Stillwater, subject to a monetary limit. Option Agreement In addition, on November 22, 2017, Sibanye-Stillwater and the
Company entered into the Option Agreement. Under the Option Agreement, the
Company granted Sibanye-Stillwater the irrevocable right and option to call on
the Company to allot and issue additional ordinary shares to
Sibanye-Stillwater, resulting in Sibanye-Stillwater holding 50.1% of all
ordinary shares of the Company (including any of the Company’s ordinary shares
held as treasury shares), subject to the condition that such option be
exercised within 24 months of the closing of the Transaction and subject to
Sibanye-Stillwater not having disposed of all or any of the Consideration
Shares during the Option Period. The Option must be exercised in whole anytime
within the Option Period. The price of such shares would be set at the 30-day
volume weighted average price per DRDGOLD's ordinary share on the Johannesburg
Stock Exchange preceding the exercise date minus 10%. During the period between
the date upon which the option is exercised and the closing date, the Company
agreed that it shall not issue any ordinary shares, and not issue any ordinary
shares and/or any securities convertible into the Company’s ordinary shares,
and/or grant any options and/or rights to 6732


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require the
issue of the Company’s ordinary shares or securities convertible into the
Company’s ordinary shares at any time or on or after the closing of the
exchange transactions, subject to certain limitations. Closing and Amending Agreement On July 31, 2018, Sibanye-Stillwater, WRTRP Proprietary Limited
and the Company entered into the Closing and Amending Agreement in connection
with the Transaction. Under the Closing and Amending Agreement, the parties
agreed to amend the Sibanye-Stillwater Exchange Agreement to, among other
things, confirm the fulfilment of or alternatively the waiver of conditions
precedent to the Transaction and provide for a revised closing process for the
Sibanye-Stillwater Exchange Agreement.  The description of the Sibanye-Stillwater Exchange Agreement, DRD
Exchange Agreement, DRD Guarantee, Option Agreement and Closing and Amending
Agreement is qualified by reference to the Sibanye-Stillwater Exchange
Agreement, DRD Exchange Agreement, DRD Guarantee, Option Agreement and Closing
and Amending Agreement filed herewith as Exhibits. ZAR300 million Revolving Credit Facility On August 1, 2018, DRDGOLD Limited entered into a ZAR300 million revolving
credit facility (“RCF”) secured with ABSA Bank Limited (acting through its
Corporate and Investment Banking division). The purpose of the RCF was to
finance the development of Phase 1 of FWGR and working capital requirements,
replacing the R100 million overdraft facility that was in place during the year
ended 30 June 2018. The RCF bears interest at JIBAR plus a margin of 325 basis points
nominal annual compounded quarterly. The borrowers are required to pay a
commitment fee of 35% of the applicable margin per annum. There is a debt
origination fee of 1% of the available commitment. Relevant covenants include that, during any rolling 12
month period, (i) the interest cover (1) shall not be less than 4
times and (ii) net debt(2) to EBITDA Ratio shall not exceed 2 times. (1) Interest cover means the ratio of EBITDA to Total
Net Interest (interest charged on Financial Indebtedness after deducting all
interest received on Cash and cash equivalents (excluding interest received on
restricted cash)). (2) Means Total Debt after deducting Cash and cash
equivalents (excluding restricted cash) The final repayment
date of the RCF is August 1, 2020. The description of the
RCF is qualified by reference to the RCF filed herewith as an Exhibit.   6832


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10D.
EXCHANGE CONTROLS  The following is a summary of the material South African exchange
control measures, which has been derived from publicly available documents. The
following summary is not a comprehensive description of all the exchange
control regulations. The discussion in this section is based on the current law
and positions of the South African Government. Changes in the law may alter the
exchange control provisions that apply, possibly on a retroactive basis.  Introduction  Dealings in foreign currency, the export of capital
and revenue, payments by residents to non-residents and various other exchange
control matters in South Africa are regulated by the South African exchange
control regulations, or the Regulations. The Regulations form part of the
general monetary policy of South Africa. The Regulations are issued under
Section 9 of the Currency and Exchanges Act, 1933 (as amended). In terms
of the Regulations, the control over South African capital and revenue
reserves, as well as the accruals and spending thereof, is vested in the
Treasury (Ministry of Finance), or the Treasury.  The Treasury has delegated the administration of
exchange controls to the Exchange Control Department of the South African
Reserve Bank, or SARB, which is responsible for the day to day administration
and functioning of exchange controls. SARB has a wide discretion. Certain banks
authorized by the Treasury to co-administer certain of the exchange controls,
are authorized by the Treasury to deal in foreign exchange. Such dealings in
foreign exchange by authorized dealers are undertaken in accordance with the
provisions and requirements of the exchange control rulings, or Rulings, and
contain certain administrative measures, as well as conditions and limits
applicable to transactions in foreign exchange, which may be undertaken by
authorized dealers. Non-residents have been granted general approval, in terms
of the Rulings, to deal in South African assets, to invest and disinvest in
South Africa.  The Regulations provide for restrictions on
exporting capital from the Common Monetary Area consisting of South Africa,
Namibia, and the Kingdoms of Lesotho and Swaziland. Transactions between
residents of the Common Monetary Area are not subject to these exchange control
regulations.  There are many inherent disadvantages to exchange
controls, including distortion of the price mechanism, problems encountered in
the application of monetary policy, detrimental effects on inward foreign
investment and administrative costs associated therewith. The South African
Finance Minister has indicated that all remaining exchange controls are likely
to be dismantled as soon as circumstances permit. Since 1998, there has been a
gradual relaxation of exchange controls. The gradual approach to the abolition
of exchange controls adopted by the Government of South Africa is designed to
allow the economy to adjust more smoothly to the removal of controls that have
been in place for a considerable period of time. The stated objective of the
authorities is equality of treatment between residents and non-residents with
respect to inflows and outflows of capital. The focus of regulation, subsequent
to the abolition of exchange controls, is expected to favor the positive
aspects of prudential financial supervision.  The present exchange control
system in South Africa is used principally to control capital movements. South
African companies are not permitted to maintain foreign bank accounts without
SARB approval and, without the approval of SARB, are generally not permitted to
export capital from South Africa or hold foreign currency. In addition, South
African companies are required to obtain the approval of the SARB prior to
raising foreign funding on the strength of their South African statements of
financial position, which would permit recourse to South Africa in the event of
defaults. Where 75% or more of a South African company's capital, voting power,
power of control or earnings is directly or indirectly controlled by
non-residents, such a corporation is designated an “affected person” by the
SARB, and certain restrictions are placed on its ability to obtain local
financial assistance. We are not, and have never been, designated an “affected
person” by the SARB.  Foreign investment and outward loans by South
African companies are also restricted. In addition, without the approval of the
SARB, South African companies are generally required to repatriate to South
Africa profits of foreign operations and are limited in their ability to
utilize profits of one foreign business to finance operations of a different
foreign business. South African companies establishing subsidiaries, branches,
offices or joint ventures abroad are generally required to submit financial
statements on these operations as well as progress reports to the SARB on an
annual basis. As a result, a South African company's ability to raise and
deploy capital outside the Common Monetary Area is restricted.  Although exchange controls have been gradually
relaxed since 1998, unlimited outward transfers of capital are not permitted at
this stage. Some of the more salient changes to the South African exchange control
provisions over the past few years have been as follows:  ·corporations wishing to invest in countries
outside the Common Monetary Area, in addition to what is set out below, apply
for permission to enter into corporate asset/share swap and share placement
transactions to acquire foreign investments. The latter mechanism entails the
placement of the locally quoted corporation's shares with long-term overseas
holders who, in payment for the shares, provide the foreign currency abroad
which the corporation then uses to acquire the target investment; ·corporations wishing to establish new
overseas ventures are permitted to transfer offshore up to R500 million to
finance approved investments abroad and up to R500 million to finance approved
new investments in African countries on an annual bases. Approval from the SARB
is required in advance for investments in excess of R500 million. On
application to the SARB, corporations are also allowed to use part of their
local cash holdings to finance up to 10% of approved new foreign investments
where the cost of these investments exceeds the current limits; ·as a general rule, the SARB requires that
more than 10% of equity of the acquired off-shore venture is acquired within a
predetermined period of time, as a prerequisite to allowing the expatriation of
funds. If these requirements are not met, the SARB may instruct that the equity
be disposed of. In our experience the SARB has taken a commercial view on this,
and has on occasion extended the period of time for compliance; and 6932


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·remittance of directors' fees payable to
persons permanently resident outside the Common Monetary Area may be approved
by authorized dealers, in terms of the Rulings.  Authorized dealers in foreign exchange may, against
the production of suitable documentary evidence, provide forward cover to South
African residents in respect of fixed and ascertained foreign exchange
commitments covering the movement of goods.  Persons who emigrate from South Africa are entitled
to take limited amounts of money out of South Africa as a settling-in allowance.
The balance of the emigrant's funds will be blocked and held under the control
of an authorized dealer. These blocked funds may only be invested in:  ·blocked current, savings, interest bearing
deposit accounts in the books of an authorized dealer in the banking sector; ·securities quoted on the JSE and financial
instruments listed on the Bond Exchange of South Africa which are deposited
with an authorized dealer and not released except temporarily for switching
purposes, without the approval of the SARB. Authorized dealers must at all
times be able to demonstrate that listed or quoted securities or financial
instruments which are dematerialized or immobilized in a central securities
depository are being held subject to the control of the authorized dealer
concerned; or ·mutual funds.  Aside from the investments referred to above,
blocked rands may only be utilized for very limited purposes. Dividends
declared out of capital gains or out of income earned prior to emigration
remain subject to the blocking procedure. It is not possible to predict when
existing exchange controls will be abolished or whether they will be continued
or modified by the South African Government in the future.  Sale of Shares  Under present exchange control regulations in South
Africa, our ordinary shares and ADSs are freely transferable outside the Common
Monetary Area between non-residents of the Common Monetary Area. In addition,
the proceeds from the sale of ordinary shares on the JSE on behalf of
shareholders who are not residents of the Common Monetary Area are freely
remittable to such shareholders. Share certificates held by non-residents will
be endorsed with the words “non-resident,” unless dematerialized.  Dividends  Dividends declared in respect of shares held by a
non-resident in a company whose shares are listed on the JSE are freely
remittable.  Any cash dividends paid by us are paid in rands.
Holders of ADSs on the relevant record date will be entitled to receive any
dividends payable in respect of the shares underlying the ADSs, subject to the
terms of the deposit agreement entered on August 12, 1996, and as amended and
restated, between the Company and The Bank of New York, as the depository.
Subject to exceptions provided in the deposit agreement, cash dividends paid in
rand will be converted by the depositary to dollars and paid by the depositary
to holders of ADSs, net of conversion expenses of the depositary, in accordance
with the deposit agreement. The depositary will charge holders of ADSs, to the
extent applicable, taxes and other governmental charges and specified fees and
other expenses.  Voting rights  There are no limitations
imposed by South African law or by our MOI on the right of non-South African
shareholders to hold or vote our ordinary shares.  7032


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10E.
TAXATION  Material South African Income Tax
Consequences  The following is a summary of
material income tax considerations under South African income tax law. No
representation with respect to the consequences to any particular purchaser of
our securities is made hereby. Prospective purchasers are urged to consult their
tax advisers with respect to their particular circumstances and the effect of
South African or other tax laws to which they may be subject.  South Africa imposes tax on worldwide income of
South African residents. Generally, individuals not resident in South Africa do
not pay tax in South Africa except in the following circumstances:  Income Tax and Withholding Tax on Dividends  Non-residents will pay income tax on any amounts
received by or accrued to them from a source within (or deemed to be within)
South Africa. Interest earned by a non-resident on a debt instrument issued by
a South African company will be regarded as being derived from a South African
source but will be regarded as exempt from taxation in terms of
Section 10(1)(i) of the South African Income Tax Act, 1962 (as amended),
or the Income Tax Act. This exemption applies to so much of any interest and
dividends (which are not otherwise exempt) received from a South African source
not exceeding (a) R34,500 if the taxpayer is 65 years of age or older or (b)
R23,800 if the taxpayer is younger than 65 years of age at the end of the
relevant tax year.  No withholding tax is deductible in respect of
interest payments made to non-resident investors.  Section 64F of the amendments to the Income Tax Act as set out in
Part VIII in Chapter II of the Income Tax Act sets out beneficial owners who
are exempt from the dividend tax which includes resident companies receiving a dividend
after the effective date, being April 1, 2012. The Convention between the
United States of America and the Republic of South Africa for the Avoidance of
Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on
Income and Capital Gains, or the Tax Treaty, would limit the rate of this tax
with respect to dividends paid on ordinary shares or ADSs to a U.S. resident
(within the meaning of the Tax Treaty) to 5% of the gross amount of the
dividends if such U.S. resident is a company which holds directly at least 10%
of our voting stock and 20% of the gross amount of the dividends in all other
cases.  The above provisions shall not apply if the
beneficial owner of the dividends is resident in the United States, carries on
business in South Africa through a permanent establishment situated in South
Africa, or performs in South Africa independent personal services from a fixed
base situated in South Africa, and the dividends are attributable to such
permanent establishment or fixed base.  In fiscal years 2018 and 2017, the corporate tax
rates for taxable mining and non‐mining income, to which the Companies in
the Group is subject, were 34% and 28%, respectively.The
formula for determining the South African gold mining tax rate for fiscal years
ended2018and2017is: Y = 34 – 170/X. Where Y is the percentage rate of tax
payable and X is the ratio of taxable income, net of any qualifying capital
expenditure that bears to mining income derived, expressed as a percentage.  With effect from
April 1, 2014,Section 8F of the Income Tax Act results inany amount of interest which is
incurred in respect of a “hybrid debt instrument” isdeemed
to be a dividendin speciedeclared by the payor and received by the recipient which is
exempt from income tax, as opposed to interest which is taxable. The terms of
some of our intercompany loanscause the affected loans to be
deemed as“hybrid
debt instruments” and the interest thereof to be deemed to be an exempt
dividendin specie. This characterization of the affected loans as a “hybrid
debt instrument” was not impacted bysubsequent amendments to Section 8F of the Income Tax Act that
became effective in fiscal year2017.  U.S. Federal Income Tax Considerations  The following discussion is a
summary of the U.S. federal income tax considerations to U.S. holders of the
ownership and disposition of ordinary shares or ADSs. It deals only with U.S. holders
who hold ordinary shares or ADSs as capital assets for U.S. federal income tax
purposes. This discussion is based upon the provisions of the Internal Revenue
Code of 1986, as amended, or the Code, published rulings, judicial decisions
and the Treasury regulations, all as currently in effect and all of which are
subject to change, possibly on a retroactive basis. This discussion has no
binding effect or official statU.S. of any kind; we cannot assure holders that
the conclusions reached below would be sustained by a court if challenged by
the Internal Revenue Service.  This discussion does not address all aspects of U.S.
federal income taxation that may be applicable to holders in light of their
particular circumstances and does not address special classes of U.S. holders
subject to special treatment (such as dealers in securities or currencies,
partnerships or other pass-through entities, banks and other financial
institutions, insurance companies, tax-exempt organizations, certain
expatriates or former long-term residents of the United States, persons holding
ordinary shares or ADSs as part of a “hedge,” “conversion transaction,”
“synthetic security,” “straddle,” “constructive sale” or other integrated
investment, persons who acquired the ordinary shares or ADSs upon the exercise
of employee stock options or otherwise as compensation, persons whose
functional currency is not the U.S. dollar, or persons that actually or
constructively own ten percent or more of the voting power or value of our
shares. This discussion addresses only U.S. federal income tax considerations
and does not address the effect of any state, local, or foreign tax laws that
may apply, the alternative minimum tax, the Medicare tax or the application of
the federal estate or gift tax.    7132


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For purposes of this discussion, a “U.S. holder”
is a beneficial owner of ordinary shares or ADSs who or that is, for U.S. federal
income tax purposes:  ·a citizen or individual resident of the United
States; ·a corporation (or any entity treated as a
corporation for U.S. federal income tax purposes) created or organized under
the laws of the United States or any political subdivision thereof; ·an estate, the income of which is subject to U.S.
federal income tax without regard to its source; or ·a trust, if a court within the United States is
able to exercise primary supervision over the administration of the trust and
one or more U.S. persons have the authority to control all substantial
decisions of the trust or if the trust has made a valid election to be treated
as a U.S. person.  If a partnership (or an entity treated as a partnership
for U.S. federal income tax purposes) holds any ordinary shares or ADSs, the
tax treatment of a partner will generally depend on the statU.S. of the partner
and on the activities of the partnership. Partners in partnerships holding any
ordinary shares or ADSs are urged to consult their tax advisors.  Because individual circumstances may differ, U.S. holders
of ordinary shares or ADSs are urged to consult their tax advisors concerning
the U.S. federal income tax considerations applicable to their particular
situations as well as any considerations to them arising under the tax laws of
any foreign, state or local taxing jurisdiction.  Ownership of Ordinary Shares or ADSs  For purposes of the Code, a U.S. holder of ADSs
will be treated for U.S. federal income tax purposes as the owner of the
ordinary shares represented by those ADSs. Exchanges of ordinary shares for
ADSs and ADSs for ordinary shares generally will not be subject to U.S. federal
income tax.  Subject to the discussion below under the heading
“Passive Foreign Investment Company”, distributions with respect to the
ordinary shares or ADSs, other than distributions in liquidation and
distributions in redemption of stock that are treated as exchanges, will be
taxed to U.S. holders as ordinary dividend income to the extent that the
distributions do not exceed our current and accumulated earnings and profits.
For U.S. federal income tax purposes, the amount of any distribution received
by a U.S. holder will equal the dollar value of the sum of the South African
rand payments made (including the amount of South African income taxes, if any,
withheld with respect to such payments), determined at the “spot rate” on the
date the dividend distribution is includable in such U.S. holder's income,
regardless of whether the payment is in fact converted into dollars. Generally,
any gain or loss resulting from currency exchange fluctuations during the
period from the date a U.S. holder includes the dividend payment in income to
the date such holder converts the payment into dollars will be treated as
ordinary income or loss. Distributions, if any, in excess of our current and
accumulated earnings and profits will constitute a non-taxable return of
capital and will be applied against and reduce the holder's basis in the
ordinary shares or ADSs.  To the extent that these distributions exceed the U.S.
holder's tax basis in the ordinary shares or ADSs, as applicable, the excess
generally will be treated as capital gain, subject to the discussion below
under the heading “Passive Foreign Investment Company”. We do not intend to
calculate our earnings or profits for U.S. federal income tax purposes. U.S. holders
should therefore assume that any distributions with respect to our ordinary
shares or ADSs will constitute dividend income.  “Qualified dividend income” received by individual U.S.
holders (as well as certain trusts and estates) generally will be taxed at a
maximum U.S. federal income tax rate applicable to capital gains.This reduced rate generally would apply to dividends paid by U.S. if,
at the time such dividends are paid, either (i) we are eligible for
benefits under a qualifying income tax treaty with the United States or
(ii) our ordinary shares or ADSs with respect to which such dividends were
paid are readily tradable on an established securities market in the United
States. However, this reduced rate is subject to certain important requirements
and exceptions, including, without limitation, certain holding period
requirements and an exception applicable if we are treated as a passive foreign
investment company as discussed under the heading “Passive Foreign Investment Company”.
U.S. holders are urged to consult their tax advisors regarding the U.S. federal
income tax rate that will be applicable to their receipt of any dividends paid
with respect to the ordinary shares and ADSs.  For purposes of this discussion, the “spot rate”
generally means a rate that reflects a fair market rate of exchange available
to the public for currency under a “spot contract” in a free market and
involving representative amounts. A “spot contract” is a contract to buy or
sell a currency on or before two business days following the date of the
execution of the contract. If such a spot rate cannot be demonstrated, the U.S.
Internal Revenue Service has the authority to determine the spot rate.  Dividend income derived with respect to the
ordinary shares or ADSs will not be eligible for the dividends received
deduction generally allowed to a U.S. corporation under Section 243 of the
Code. Dividend income will be treated as foreign source income for foreign tax
credit and other purposes. In computing the separate foreign tax credit
limitations, dividend income should generally constitute “passive category
income,” or in the case of certain U.S. holders, “general category income.”    7232


---

Passive Foreign
Investment Company  A special and adverse set of U.S. federal income
tax rules apply to a U.S. holder that holds stock in a passive foreign
investment company, or PFIC. We would be a PFIC for U.S. federal income tax
purposes if for any taxable year either (i) 75% or more of our gross
income, including our pro rata share of the gross income of any company in
which we are considered to own 25% or more of the shares by value, were passive
income or (ii) 50% or more of our average total assets (by value),
including our pro rata share of the assets of any company in which we are
considered to own 25% or more of the shares by value, were assets that produced
or were held for the production of passive income. If we were a PFIC, U.S. holders
of the ordinary shares or ADSs would be subject to special rules with respect
to (i) any gain recognized upon the disposition of the ordinary shares or
ADSs and (ii) any receipt of an excess distribution (generally, any
distributions to a U.S. holder during a single taxable year that is greater
than 125% of the average amount of distributions received by such U.S. holder
during the three preceding taxable years in respect of the ordinary shares or
ADSs or, if shorter, such U.S. holder's holding period for the ordinary shares
or ADSs). Under these rules:  ·the gain or excess distribution will be
allocated ratably over a U.S. holder's holding period for the ordinary shares
or ADSs, as applicable; ·the amount allocated to the taxable year in
which a U.S. holder realizes the gain or excess distribution will be taxed as
ordinary income; ·the amount allocated to each prior year
(other than a pre-PFIC year), with certain exceptions, will be taxed at the
highest tax rate in effect for that year; and ·the interest charge generally applicable to
underpayments of tax will be imposed in respect of the tax attributable to each
such year (other than a pre-PFIC year).  Although we generally will be treated as a PFIC as
to any U.S. holder if we are a PFIC for any year during a U.S. holder's holding
period, if we cease to satisfy the requirements for PFIC classification, the U.S.
holder may avoid PFIC classification for subsequent years if such holder elects
to recognize gain based on the unrealized appreciation in the ordinary shares
or ADSs through the close of the tax year in which we cease to be a PFIC.  A U.S. holder of a PFIC are required to file an
annual report with the Internal Revenue Service containing such information as
the U.S. Secretary of Treasury may require.  A U.S. holder of the ordinary shares or ADSs that
are treated as “marketable stock” under the PFIC rules may be able to avoid the
imposition of the special tax and interest charge described above by making a
mark-to-market election. Pursuant to this election, the U.S. holder would
include in ordinary income or loss for each taxable year an amount equal to the
difference as of the close of the taxable year between the fair market value of
the ordinary shares or ADSs and the U.S. holder's adjusted tax basis in such
ordinary shares or ADSs. Losses would be allowed only to the extent of net
mark-to-market gain previously included by the U.S. holder under the election
for prior taxable years. If a mark-to-market election with respect to ordinary
shares or ADSs is in effect on the date of a U.S. holder's death, the tax basis
of the ordinary shares or ADSs in the hands of a U.S. holder who acquired them
from a decedent will be the lesser of the decedent's tax basis or the fair
market value of the ordinary shares or ADSs. U.S. holders desiring to make the
mark-to-market election are urged to consult their tax advisors with respect to
the application and effect of making the election for the ordinary shares or
ADSs.  In the case of a U.S. holder who holds ordinary
shares or ADSs and who does not make a mark-to-market election, the special tax
and interest charge described above will not apply if such holder makes an
election to treat U.S. as a “qualified electing fund” in the first taxable year
in which such holder owns the ordinary shares or ADSs and if we comply with
certain reporting requirements. However, we do not intend to supply U.S. holders
with the information needed to report income and gain pursuant to a “qualified
electing fund” election in the event that we are classified as a PFIC.  We believe that we were not a PFIC for our
fiscal year ended June 30,2018. However, under the PFIC rules income and assets are require to be
measured and classified in accordance with U.S. federal income tax principles.
Our analysis is based on our financial statements as prepared in accordance
with IFRS, which may substantially differ from U.S. federal income tax
principles. Therefore, no assurance can be given that we were not a PFIC.
Furthermore, the tests for determining whether we would be a PFIC for any
taxable year are applied annually and it is difficult to make accurate
predictions of future income and assets, which are relevant to this
determination. In addition, certain factors in the PFIC determination, such as
reductions in the market value of our capital stock, are not within our control
and can cause U.S. to become a PFIC. Accordingly, there can be no assurance
that we will not become a PFIC.  The rules relating to PFICs are very complex.
U.S. holders are urged to consult their tax advisors regarding the application
of the PFIC rules to their investments in our ordinary shares or ADSs.  Disposition of Ordinary Shares or ADSs  Subject to the discussion
above under the heading “Passive Foreign Investment Company”, upon a sale,
exchange, or other taxable disposition of ordinary shares or ADSs, a U.S. holder
will recognize gain or loss in an amount equal to the difference between the U.S.
dollar value of the amount realized on the sale or exchange and such holder's
adjusted tax basis in the ordinary shares or ADSs. Subject to the application
of the “passive foreign investment company” rules discussed above, such gain or
loss generally will be capital gain or loss and will be long-term capital gain
or loss if the U.S. holder has held the ordinary shares or ADSs for more than
one year. The deductibility of capital losses is subject to limitations. Gain
or loss recognized by a U.S. holder on the taxable disposition of ordinary
shares or ADSs generally will be treated as U.S.‐source gain or loss for U.S.
foreign tax credit purposes.     7332


---

In the case of a cash basis U.S.
holder who receives rands in connection with the taxable disposition of
ordinary shares or ADSs, the amount realized will be based on the spot rate as
determined on the settlement date of such exchange. A U.S. holder who receives
payment in rand and converts rand into U.S. dollars at a conversion rate other
than the rate in effect on the settlement date may have a foreign currency
exchange gain or loss that would be treated as ordinary income or loss.  An accrual basis U.S. holder
may elect the same treatment required of cash basis taxpayers with respect to a
taxable disposition of ordinary shares or ADSs, provided that the election is
applied consistently from year to year. Such election may not be changed
without the consent of the Internal Revenue Service. In the event that an
accrual basis holder does not elect to be treated as a cash basis taxpayer,
such U.S. holder may have a foreign currency gain or loss for U.S. federal
income tax purposes because of the differences between the U.S. dollar value of
the currency received prevailing on the trade date and the settlement date. Any
such currency gain or loss will be treated as ordinary income or loss and would
be in addition to gain or loss, if any, recognized by such U.S. holder on the
disposition of such ordinary shares or ADSs.  Information with respect to Foreign Financial
Assets  Certain U.S. holders may be required to report on
Internal Revenue Service Form 8938 information relating to an interest in
ordinary shares or ADSs, subject to certain exceptions (including an exception
for assets held in accounts maintained by certain financial institutions,
although the account itself may be reportable if held at a non-U.S. financial
institution). U.S. holders should consult their tax advisers regarding the
effect, if any, of this reporting requirement on their acquisition, ownership
and disposition of ordinary shares or ADSs. U.S. holders should consult their
tax advisors regarding application of the information reporting and backup
withholding rules.  10F. DIVIDENDS AND PAYING AGENTS  Not
applicable  10G. STATEMENT BY
EXPERTS  Not
applicable.  10H. DOCUMENTS ON
DISPLAY  You may request a copy of our US Securities and Exchange
Commission filings, at no cost, by writing or calling us at DRDGOLD Limited,
P.O. Box 390, Maraisburg, Johannesburg, South Africa 1700. Attn: Group
Company Secretary. Tel No. +27-11-470-2600. A copy of each report
submitted in accordance with applicable United States law is available for
public review at our principal executive offices at DRDGOLD Limited, 1 Sixty
Jan Smuts Building, 2nd Floor - North Tower, 160 Jan Smuts Avenue, Rosebank,
2196, South Africa.  10I. SUBSIDIARY
INFORMATION  Not
applicable.  7432


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ITEM 11.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  General  In the normal course of our operations, we are
exposed to market risk, including commodity price, foreign currency, interest
and credit risks. During fiscal 2018 we do not hold or issue derivative
financial instruments for speculative purposes, nor did we hedge forward gold
sales.Refer to Item 18. ‘‘Financial Statements -
Note 26 - Financial instruments’’ of the consolidated financial statements for
a qualitative and quantitative discussion of our exposure to these market
risks.  Our long-term strategy is to remain unhedged
and to keep borrowings to a minimum. However, the need for medium-term
borrowings for the first-phase development of FWGR introduced some liquidity
risk. To mitigate this liquidity risk, we entered into a zero-cost collar to
provide price protection against a possible decrease in the Rand gold price
while borrowings are in place. 50 000 ounces of gold is committed to this
zero-cost collar, spread equally over nine months commencing September 2018
with a floor of R 565 000/kg and a ceiling of just under R609 000/kg and will
be settled in cash at the end of each month.  Commodity price risk  The rand market price of gold has a significant
effect on our results of operations, our ability and the ability of our
subsidiaries to pay dividends and undertake capital expenditures, and the
market price of our ordinary shares or ADSs. Historically, rand gold prices
have fluctuated widely and are affected by numerous industry factors over which
we have no control. The aggregate effect of these factors on the rand gold
price is impossible for us to predict. The rand price of gold may not remain at
a level allowing us to economically exploit our reserves.  It is our long-term policy not to hedge this
commodity price risk. However, in instances where we need to incur medium-term borrowings
to finance growth projects that introduce some liquidity risk to the Group, we
may mitigate this liquidity risk by entering into an arrangement to provide
price protection against a possible decrease in the Rand gold price while
borrowings are in place.  Concentration of credit risk  Credit risk is the risk of financial loss to
us if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from our receivables from customers
and investment securities.  The Group manages its exposure to credit risk on
trade receivables by maintaining a short term cycle to settlement of 2 days.
The Group manages its exposure to credit risk on other receivables by dealing
with a number of counterparties, ensuring that these counterparties are of good
credit standing and transacting on a secured or cash basis where considered
required. Receivables are regularly monitored and assessed for recoverability.  Foreign currency risk  Our reporting currency is South African rand.
Although gold is sold in US dollars, the Company is obliged to convert this
into rands. We are thus exposed to fluctuations in the US dollar/rand exchange
rate. Foreign exchange fluctuations affect the cash flow that we will realize
from our operations as gold is sold in US dollars, while production costs are
incurred primarily in rands. Our results are positively affected when the US
dollar strengthens against the rand and adversely affected when the US dollar
weakens against the rand. Our cash and cash equivalent balances are held in US
dollars and rands. Holdings denominated in other currencies are insignificant.  Long-term
  debtSet
  out below is an analysis of our debt as at June 30, 2018. All of our
  long-term debt is denominated in South African rand.Interest rateFixed rate
 
 
 17.90%Weighted average interest rate
 
 
 17.90%R'mRepayment period2019
 
 
 3.62020
 
 
 11.1Total
 
 
 14.7Based
  on our fiscal year 2018 financial results, a hypothetical 100 basis points
  (increase)/decrease in interest rate activity would (increase)/decrease our
  interest expense by R0.1 million.
 7532


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ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY
SECURITIES  12A. DEBT SECURITIES  Not applicable. 12B. WARRANTS AND
RIGHTS  Not applicable.  12C. OTHER SECURITIES  Not applicable.  12D. AMERICAN
DEPOSITARY SHARES  Depositary Fees and Charges  DRDGOLD’s American Depository Shares, or ADSs, each
representing ten of DRDGOLD’s ordinary shares, are traded on the New York Stock
Exchange, or NYSE under the symbol “DRD” (until December 29, 2011 our ADSs were
traded on the Nasdaq Capital Market under the symbol “DROOY”). The ADSs are
evidenced by American Depository Receipts, or ADRs, issued by The Bank of New
York Mellon, as Depository under the Amended and Restated Deposit Agreement
dated as of August 12, 1996, as amended and restated as of October 2, 1996, as
further amended and restated as of August 6, 1998, as further amended and
restated July 23, 2007, among DRDGOLD Limited, The Bank of New York Mellon and
owners and beneficial owners of ADRs from time to time. ADR holders may have to
pay the following service fees to the Depositary:  Service
 
 Fees (USD)Issuance of ADSs, including issuances
  resulting from a distribution of ordinary shares or rights
 $5.00 (or less) per 100 ADSs (or portion
  thereof)1Cancellation of ADSs for the purpose of
  withdrawal, including if the Deposit Agreement terminates
 $5.00 (or less) per 100 ADSs (or portion
  thereof)1Distribution of cash dividends or other
  cash distributions
 2 cents (or less) per ADS (or portion
  thereof)Distribution of securities distributed to
  holders of deposited securities which are distributed by the Depositary to
  ADS registered holders
 $5.00 (or less) per 100 ADSs (or portion
  thereof)In addition, ADR holders are responsible
  for certain fees and expenses incurred by the Depositary on their behalf
  including (1) taxes and othergovernmental charges, (2) such
  registration fees as may from time to time be in effect for the registration
  of transfers of ordinary shares generally on the share register and
  applicable to transfers of ordinary shares to the name of the Depositary or
  its nominee or the Custodian or its nominee on the making of deposits or
  withdrawals, (3) such cable, telex and facsimile transmission expenses as are
  expressly provided in the Deposit Agreement, and (4) such expenses as are
  incurred by the Depositary in the conversion of foreign currency to U.S.
  Dollars.[1]These fees are typically paid to the
  Depositary by the brokers on behalf of their clients receiving the newly-issued
  ADSs from the Depositary or delivering the ADSs to the Depositary for
  cancellation. The brokers in turn charge these transaction fees to their
  clients.
 The Depositary collects its fees for delivery
and surrender of ADSs directly from investors depositing or surrendering ADSs
for the purpose of withdrawal or from intermediaries acting for them. The
Depositary, collects fees for making distributions to investors by deducting
those fees from the amounts distributed or by selling a portion of
distributable property to pay the fees. The Depositary may collect its annual
fee for depositary services by deductions from cash distributions or by
directly billing investors or by charging the book-entry system accounts of
participants acting for them. The Depositary may generally refuse to provide
fee-attracting services until its fees for those services are paid.  Depositary Payments  The Bank of New York Mellon, as Depositary,
has agreed to reimburse DRDGOLD an annual amount of $75,000 mainly consisting
of accumulated contributions towards the Company’s investor relations
activities (including investor meetings, conferences and fees of investor
relations service vendors). After the deduction of other fees, the annual
reimbursement for the year ended June 30, 2018 amounts to approximately $5,974
(June 30, 2017: $44,509, (June 30, 2016: $43,400). DRDGOLD is also entitled to
a 25% share of the dividend fees which amounts to approximately $20,195 for the
year ended June 30, 2018 (June 30, 2017: $24,813). 7632


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PART II ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND
DELINQUENCIES  There
have been no material defaults in the payment of principal, interest, a sinking
or purchase fund installment, or any other material defaults with respect to
any indebtedness of ours.  ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF
SECURITY HOLDERS AND USE OF PROCEEDS  Not
applicable.  ITEM
15. CONTROLS AND PROCEDURES  15A. Disclosure Controls and Procedures  As of June 30, 2018, our management, with the participation of our
Chief Executive Officer and Chief Financial Officer have evaluated the
effectiveness of our disclosure controls and procedures (as this term is
defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Our management,
including the Chief Executive Officer and Chief Financial Officer, concluded
that our disclosure controls and procedures were effective as of June 30, 2018.  Our disclosure controls and procedures are designed to provide
reasonable assurance that information required to be disclosed by us in the
reports that we file or submit under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported, within the time periods specified
in the applicable rules and forms and that such information required to be
disclosed by us in the reports we file or submit under the Securities Exchange
Act is accumulated and communicated to our management, including our Chief
Executive Officer and Chief Financial Officer, as appropriate to allow timely
decisions regarding required disclosures.  There are inherent limitations in the effectiveness of any system
of disclosure controls and procedures. These limitations include the
possibility of human error and the circumvention or overriding of the controls
and procedures. Accordingly, any such system can only provide reasonable
assurance of achieving the desired control objectives.  15B. Management’s Annual Report on Internal Control Over
Financial Reporting  Our management is responsible for establishing and maintaining
adequate internal control over financial reporting. Internal control over
financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under
the Securities Exchange Act of 1934 as a process designed by, or under the
supervision of, our Chief Executive Officer and Chief Financial Officer and
effected by our board, management and other personnel to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with IFRS. Under
Section 404 of the Sarbanes Oxley Act of 2002, management is required to assess
our internal controls surrounding the financial reporting process as at the end
of each fiscal year. Based on that assessment, management is to determine
whether or not our internal controls over financial reporting are effective.  Internal control over financial reporting includes those policies
and procedures that:  ·pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of our assets; ·provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with
IFRS, and that our receipts and expenditures are being made only in accordance
with authorizations of our management and board; and ·provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of our assets that
could have a material effect on our financial statements.  Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Instead, it must
be noted that even those systems that management deems to be effective can only
provide reasonable assurance with respect to the preparation and presentation
of our financial statements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or the degree of compliance
with the policies and procedures.  Our management assessed the effectiveness of our internal control
over financial reporting as of June 30, 2018. In making this
assessment, our management used the criteria set forth by theInternal
Control-Integrated Framework (2013)issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Based on our assessment and
those criteria, our management concluded that as of June 30, 2018 our internal
control over financial reporting was effective.  15C. Independent Auditor’s Attestation Report  The effectiveness of internal control over financial reporting as
of June 30, 2018 was audited by KPMG Inc., independent registered public
accounting firm, as stated in their report on page F-1 of this Form 20-F.  7732


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15D. Changes in Internal Control Over
Financial Reporting  Changes that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting during the
period covered by the annual report, need to be identified and reported as
required by paragraph (d) of Rule 13a-15.  During the year ended June 30, 2018, there have not been any
changes in our internal control over financial reporting that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.  ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT  Mr. J.A.Holtzhausen, Chairman of the Audit and Risk Committee, has been determined by
our board to be an audit committee financial expert within the meaning of the
Sarbanes-Oxley Act, in accordance with the Rules of the New York Stock Exchange, or NYSE,and rules promulgated by the SEC
andindependent both under the New York
Stock Exchange Rules and the South African Johannesburg Stock Exchange Rules.
The board is satisfied that the skills, experience and attributes of the
members of the audit and risk committee are sufficient to enable those members
to discharge the responsibilities of the audit and risk committee.  ITEM 16B. CODE OF ETHICS  We have adopted a Code of
Conduct that applies to all senior executives including our Non-Executive
Chairman, the Chief Executive Officer, Chief Financial Officer, Chief Operating
Officer and the Financial Director at our mining operation as well as all other
employees. The Code of Conduct was updated during fiscal 2018. The Code of Conduct
can be accessed on the Company’s website at the following web address: www.drdgold.com/about-us/governance.   ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND
SERVICES  KPMG Inc. has served as our independently registered public
accountant for the fiscal years ended June 30, 2018, 2017 and 2016, for which
audited financial statements appear in this Annual Report. The Annual General
Meeting elects the auditors annually.  The following table presents the aggregate fees for
professional audit services and other services rendered by KPMG Inc. to us in
fiscal year 2018 and 2017:  Audit
Fees  Audit fees billed for the annual audit
services engagement, which are those services that the external auditor
reasonably can provide, include the company audit; statutory audits; comfort
letters and consents; attest services; and assistance with and review of
documents filed with the SEC.  Auditors' remuneration
 Year ended June 30,2018
 2017R m
 R mAudit fees
 5.7
 5.5All other fees
 1.7
 0.3Total
 7.4
 5.8
  All Other Fees  The
all other fees paid during fiscal year 2018 consist of the following: ·R0.4 million with respect to limited assurance provided by KPMG on
specified items contained in our Integrated Report for fiscal year 2017; ·R1.0 million with respect to Independent reporting accountant’s
report on the Pro Forma financial information and historical financial
information included in the WRTRP Circular to Shareholders, and ·R0.3 million with respect to an Independent reporting accountant’s
report on the WRTRP forecast financial information included in the Circular to
Shareholders.  The
all other fees paid during fiscal year 2017 consist of fees invoiced with
respect to limited assurance provided by KPMG on specified items contained in
our Integrated Report for fiscal year 2016. Subsequent to June 30, 2018 KPMG
was engaged to provide limited assurance on specified items contained in our
Integrated Report for fiscal year 2018 that was billed during fiscal year 2019.
Subsequent to June 30, 2018 KPMG was also engaged to provide limited assurance
on the compliance of the Form 20-F with the SEC filing requirements for XBRL
reporting for fiscal year 2018 that will be invoiced during fiscal year 2019.  The
Audit and Risk Committee is directly responsible for recommending the
appointment, re-appointment and removal of the external auditors as well as the
remuneration and terms of engagement of the external auditors. The committee
pre-approves, and has pre-approved, all non-audit services provided by the
external auditors. TheAudit and Risk
Committee considered all of the fees mentioned above and determined that such
fees are compatible with maintaining KPMG Inc.’s independence. 7832


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---

ITEM
16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES  Not
applicable.  ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND
AFFILIATED PURCHASERS  Not
applicable.  ITEM 16F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT  Not
applicable.  ITEM 16G. CORPORATE GOVERNANCE  As
a foreign private issuer with shares listed on the NYSE, we are subject to
corporate governance requirements imposed by NYSE. Under section 303A.11 of the
NYSE Listing Standards, a foreign private issuer such as us may follow its home
country corporate governance practices in lieu of certain of the NYSE Listing
Standards on corporate governance. The following paragraphs summarize the
significant differences between these various requirements and how it is
implemented by DRDGOLD:  Shareholder meeting quorum requirements  Section 310.00 of the NYSE Listing Standards
provides that the quorum required for any meeting of holders of common stock
should be sufficiently high to insure a representative vote. Consistent with
the practice of companies incorporated in South Africa, our Memorandum of
Incorporation requires a quorum of three members present with sufficient voting
powers in person or by proxy to exercise in aggregate 25% of the voting rights
and we have elected to follow our home country rule.  ITEM 16H. MINE SAFETY DISCLOSURES Not applicable.  8032


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PART III  ITEM 17. FINANCIAL STATEMENTS  Not
applicable.  ITEM
  18 FINANCIAL STATEMENTSThe
  following annual financial statements and related auditor’s reports are filed
  as part of this Annual Report
 PageReport
  of the Independent Registered Public Accounting Firm
 F‐1Consolidated
  statement of profit or loss and other comprehensive income for the years
  ended June 30, 2018, 2017 and 2016
 F-3Consolidated
  statement of financial position at June 30, 2018 and 2017
 F‐4Consolidated
  statement of changes in equity for the years ended June 30, 2018, 2017 and
  2016
 F‐5Consolidated
  statement of cash flows for the years ended June 30, 2018, 2017 and 2016
 F‐4Notes
  to the financial statements
 F‐1 to F‐28About
  these consolidated financial statements
 1Use of
  accounting assumptions, estimates and judgements
 2New standards,
  amendments to standards and interpretations not yet adopted
 3PerformanceRevenue
 4Results
  from operating activities
 5Cost
  of sales
 5.1Other
  income
 5.2Administration
  expenses and other costs
 5Finance
  income
 6Finance
  expense
 7Earnings
  per share
 8Resource
  assets and related liabilitiesProperty,
  plant and equipment
 9Provision
  for environmental rehabilitation
 10Investment
  in rehabilitation obligation funds
 11Working
  capitalCash
  and cash equivalents
 12Cash
  generated by operations
 13Trade
  and other receivables
 14Trade
  and other payables
 15Inventories
 16TaxIncome
  tax
 17Income
  tax expense
 17.1Deferred
  tax
 17.2Employee
  mattersEmployee
  benefits
 18Liability
  for long term incentive scheme
 18.1Transactions
  with key management personnel
 18.2Capital
  and equityCapital
  management
 19Equity
 20Disclosure
  itemsOperating
  segments
 21Interest
  in subsidiaries
 22Assets
  and liabilities classified as held for sale
 23Financial
  Assets
 24Investments
  in other entities
 24.1Long-term
  receivable
 24.2Contingent
  assets and liabilities
 25Financial
  instruments
 26Related
  parties
 27Subsequent
  events
 28


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Report of Independent Registered Public Accounting Firm To the Shareholders and Board
of Directors
DRDGOLD Limited: Opinions on the Consolidated Financial Statements and Internal
Control Over Financial Reporting We have audited the accompanying consolidated statements of
financial postion of DRDGOLD Limited and subsidiaries (the Company) as of
June 30, 2018 and 2017, the related consolidated statements of profit or
loss and other comprehensive income, changes in equity, and cash flows for each
of the years in the three-year period ended June 30, 2018, and the related
notes (collectively, the consolidated financial statements). We also have
audited the Company’s internal control over financial reporting as of
June 30, 2018, based on criteria established in Internal Control –
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations
of the Treadway Commission. In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of the
Company as of June 30, 2018 and 2017, and the results of its operations
and its cash flows for each of the years in the three-year period ended
June 30, 2018, in conformity with International Financial Reporting
Standards as issued by the International Accounting Standards Board. Also in
our opinion, the Company maintained, in all material respects, effective
internal control over financial reporting as of June 30, 2018, based on
criteria established in Internal Control – Integrated Framework (2013) issued
by the Committee of Sponsoring Organizations of the Treadway Commission. Basis
for Opinions The Company’s management is responsible for these consolidated
financial statements, for maintaining effective internal control over financial
reporting, and for its assessment of the effectiveness of internal control over
financial reporting, included in the accompanying Management’s Annual Report on
Internal Control Over Financial Reporting. Our responsibility is to express an
opinion on the Company’s consolidated financial statements and an opinion on
the Company’s internal control over financial reporting based on our audits. We
are a public accounting firm registered with the Public Company Accounting
Oversight Board (United States) (PCAOB) and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and
the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB. We conducted our audits in accordance with the standards of the
PCAOB. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement, whether due to error or fraud, and whether
effective internal control over financial reporting was maintained in all
material respects. Our audits of the consolidated financial statements included
performing procedures to assess the risks of material misstatement of the
consolidated financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in
the consolidated financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the consolidated financial
statements. Our audit of internal control over financial reporting included
obtaining an understanding of internal control over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the
assessed risk. Our audits also included performing such other procedures as we
considered necessary in the circumstances. We believe that our audits provide a
reasonable basis for our opinions.   8232


---

Definition and Limitations of Internal Control Over Financial
Reporting A company’s internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal
control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets
of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a
material effect on the financial statements. Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.   We have
served as the Company’s auditor since 2003. Secunda,
Republic of South Africa
October 31, 2018


---

Amounts in R million
 Note
 2018
 2017
 2016Revenue
 4
 2 490.4
 2 339.9
 2 433.1Cost of sales
 5.1
 (2 347.7)
 (2 307.9)
 (2 236.8)Gross profit from operating activities
 
 142.7
 32.0
 196.3Other income
 5.2
 -
 12.9
 10.5Administration expenses and other costs
 5.3
 (90.7)
 (69.4)
 (87.2)Results from operating activities
 
 52.0
 (24.5)
 119.6Finance income
 6
 38.8
 40.0
 36.8Finance expense
 7
 (58.4)
 (52.2)
 (47.6)Profit/(loss) before tax
 
 32.4
 (36.7)
 108.8Income tax
 17.1
 (25.9)
 50.4
 (46.9)Profit for the year
 
 6.5
 13.7
 61.9Other comprehensive incomeItems that will be reclassified subsequently
  to profit or loss, net of taxNet fair value adjustment on available-for-sale investments
 24.1
 0.6
 (0.3)
 4.4Total other comprehensive income for the year
 
 0.6
 (0.3)
 4.4Total comprehensive income for the year
 
 7.1
 13.4
 66.3Earnings per shareBasic earnings per share (SA cents per share)
 8
 1.5
 3.2
 14.7Diluted earnings per share (SA cents per share)
 8
 1.5
 3.2
 14.7The accompanying notes are an integral part of these
  consolidated financial statements.
 8432


---

Amounts in R million
 Note
 2018
 2017ASSETSNon-current assets
 
 1 734.1
 1 739.1Property, plant and equipment
 9
 1 452.7
 1 497.6Investments in rehabilitation obligation funds
 11
 244.0
 227.7Financial assets
 24
 28.7
 8.8Deferred tax asset
 17.2
 8.7
 5.0Current assets
 
 626.3
 548.3Inventories
 16
 233.0
 180.3Trade and other receivables
 14
 91.2
 114.3Cash and cash equivalents
 12
 302.1
 253.7TOTAL ASSETS
 
 2 360.4
 2 287.4EQUITY AND LIABILITIESEquity
 20
 1 267.3
 1 302.4Non-current liabilities
 
 772.4
 728.0Provision for environmental rehabilitation
 10
 553.4
 531.7Deferred tax liability
 17.2
 163.7
 140.5Employee benefits
 18
 40.6
 39.0Finance lease obligation
 9
 14.7
 16.8Current liabilities
 
 320.7
 257.0Trade and other payables
 15
 303.3
 251.8Employee benefits
 18
 13.2
 -Current tax Liability
 
 4.2
 5.2TOTAL LIABILITIES
 
 1 093.1
 985.0TOTAL EQUITY AND LIABILITIES
 
 2 360.4
 2 287.4The accompanying notes are an integral part of these
  consolidated financial statements.
 8532


---

Availablefor saleShare
 and other
 Retained
 TotalAmounts in R million
 Note
 capital
 reserves
 earnings
 equityBalance at 30 June 2015
 
 4 181.4
 135.8
 (2 787.3)
 1 529.9Total comprehensive incomeProfit for the year
 
 
 
 61.9
 61.9Other comprehensive income
 24.1
 
 4.4
 
 4.4Transactions with the owners of the parentDividend on ordinary share capital
 20
 
 
 (252.9)
 (252.9)Shares issued for cash
 
 2.8
 
 
 2.8Treasury shares acquired through subsidiary
 
 (6.5)
 
 
 (6.5)Balance at 30 June 2016
 
 4 177.7
 140.2
 (2 978.3)
 1 339.6Total comprehensive incomeProfit for the year
 
 
 
 13.7
 13.7Other comprehensive income
 24.1
 
 
 (0.3)
 (0.3)Transactions with the owners of the parentDividend on ordinary share capital
 20
 
 
 (50.6)
 (50.6)Available for sale and other reserves transferred to retained
  earnings
 
 
 (140.2)
 140.2
 -Balance at 30 June 2017
 
 4 177.7
 -
 (2 875.3)
 1 302.4Total comprehensive incomeProfit for the year
 
 
 
 6.5
 6.5Other comprehensive income
 24.1
 
 
 0.6
 0.6Transactions with the owners of the parentDividend on ordinary share capital
 20
 
 
 (42.2)
 (42.2)Balance at 30 June 2018
 
 4 177.7
 -
 (2 910.4)
 1 267.3Note
 
 20The accompanying notes are an integral part of these
  consolidated financial statements.
 8632


---

Amounts in R million
 Note
 2018
 2017
 2016CASH FLOWS FROM OPERATING ACTIVITIESCash generated by operations
 13
 222.9
 21.5
 398.2Finance income received
 
 21.9
 23.8
 22.3Finance expenses paid
 
 (3.5)
 (3.7)
 (5.0)Income tax (paid)/received
 
 (7.5)
 10.0
 0.4Net cash inflow from operating activities
 
 233.8
 51.6
 415.9CASH FLOWS FROM INVESTING ACTIVITIESAcquisition of property, plant and equipment
 
 (125.9)
 (110.6)
 (99.8)Proceeds on disposal of property, plant and equipment
 
 7.0
 20.5
 7.0Environmental rehabilitation payments
 10
 (21.5)
 (11.6)
 (10.6)Other
 
 -
 5.0
 (3.8)Net cash outflow from investing activities
 
 (140.4)
 (96.7)
 (107.2)CASH FLOWS FROM FINANCING ACTIVITIESRepayments of loans and borrowings
 
 -
 -
 (22.5)Repayment of finance lease obligation
 
 (2.8)
 (2.4)
 (2.0)Dividends paid on ordinary share capital
 20
 (42.2)
 (50.6)
 (252.9)Proceeds from the issue of shares
 
 -
 -
 2.8Acquisition of treasury shares
 
 -
 -
 (6.5)Net cash outflow from financing activities
 
 (45.0)
 (53.0)
 (281.1)NET INCREASE/(DECREASE) IN CASH AND CASH
  EQUIVALENTS
 
 48.4
 (98.1)
 27.6Cash and cash equivalents at the beginning of the year
 
 253.7
 351.8
 324.4Foreign exchange movements
 
 -
 -
 (0.2)CASH AND CASH EQUIVALENTS AT THE END OF THE
  YEAR
 12
 302.1
 253.7
 351.8The accompanying notes are an integral part of these
  consolidated financial statements.
 8732


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1  ABOUT THESE CONSOLIDATED FINANCIAL STATEMENTS  Reporting entity The DRDGOLD Group is primarily involved in the retreatment of
surface gold. The consolidated financial statements comprise the Company and
its subsidiaries who are all wholly owned subsidiaries and solely operates in
South Africa (collectively the “Group” and individually “Group Companies”).
DRDGOLD Limited is domiciled in South Africa with a registration number of
1895/000926/06. The registered address of the company is 1 Sixty Jan Smuts
Building, 2nd Floor - North Tower, 160 Jan Smuts Avenue, Rosebank, 2196.  Basis
of accounting The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS) and its
interpretations adopted by the International Accounting Standards Board (IASB).  The consolidated financial statements were approved by the board
of directors on October 24, 2018.  Functional
and presentation currency The Group's functional and
reporting currency is South African rand. The amounts in these consolidated
financial statements are rounded to the nearest million unless stated
otherwise. Significant exchange rates applied during the year are set out in
the table below:  South African rand / US dollar
 2018
 2017
 2016Spot rate at year end
 13.72
 13.05
 14.68Average rate for the financial year
 12.85
 13.59
 14.5
  Basis of measurement The consolidated financial statements are prepared on the
historical cost basis, unless otherwise stated. Basis of
consolidation Subsidiaries Subsidiaries are entities controlled by the Group. The Group controls
an entity when it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through
its power over the entity. The financial statements of subsidiaries are
included in the consolidated financial statements from the date that control
commences until the date that control ceases. Transactions eliminated on consolidation Intra-group balances, transactions and any unrealised gains and
losses or income and expenses arising from intra-group transactions, are
eliminated in preparing the consolidated financial statements.   2USE OF ACCOUNTING ASSUMPTIONS, ESTIMATES AND
JUDGEMENTS The preparation of the consolidated financial statements requires
management to make accounting assumptions, estimates and judgements that affect
the application of the Group's accounting policies and reported amounts of
assets and liabilities, income and expenses.  Accounting assumptions, estimates and judgements are reviewed on
an ongoing basis. Revisions to reported amounts are recognised in the period in
which the revision is made and in any future periods affected. Actual results
may differ from these estimates.  Information about assumptions and estimates in applying accounting
policies that have the most significant effect on the amounts recognised in the
consolidated financial statements are included in the notes: NOTE 9      PROPERTY, PLANT AND EQUIPMENT NOTE 10      PROVISION FOR ENVIRONMENTAL REHABILITATION NOTE 17      INCOME TAX NOTE 24.2   LONG-TERM RECEIVABLE  Information about significant judgements in applying accounting
policies that have the most significant effect on the amounts recognised in the
consolidated financial statements are included in the notes: NOTE 23      ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE NOTE 24.2   LONG-TERM RECEIVABLE NOTE 25      CONTINGENT ASSETS AND LIABILITIES   8832


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3NEW STANDARDS, AMENDMENTS TO STANDARDS AND
INTERPRETATIONS NOT YET ADOPTED  At the date of authorisation
of these consolidated financial statements, the following relevant standards,
amendments to standards and interpretations that may be applicable to the
business of the Group were in issue but not yet effective and may therefore
have an impact on future consolidated financial statements. These new
standards, amendments to standards and interpretations will be adopted at their
effective dates. IFRS 2
Share-based payment amendments (Effective date 1 July 2018) Measurement
of cash-settled share-based payments – There is currently no guidance in IFRS 2
on how to measure the fair value of the liability in a cash-settled share based
payment. The amendments clarify that a cash-settled share-based payment is
measured using the same approach as for equity-settled share-based payments –
i.e. the modified grant date method. Therefore, in measuring the liability,
market and non-vesting conditions are taken into account in measuring its fair
value and the number of awards to receive cash is adjusted to reflect the best
estimate of those expected to vest as a result of satisfying service and any
non-market performance conditions. The
Group has assessed that the amendment to IFRS 2 will not have a significant
impact on the Group as market and non-vesting conditions are being taken into
account in measuring its fair value and the number of awards to receive cash is
already adjusted to reflect the best estimate of those expected to vest as a
result of satisfying service and any non-market performance conditions. IFRS 9
Financial Instruments (Effective date 1 July 2018) The
standard sets out requirements for recognising and measuring financial
instruments and supersedes IAS 39Financial Instruments. It contains new
criteria for determining the classification of financial instruments which is
based on the business model of the entity and the nature of cash flows. In
addition, the financial instruments impairment model has been changed from an
“incurred loss” model in IAS 39 to an “expected credit loss” model in IFRS 9.
The resultant effect being that it will no longer be necessary for a loss event
to occur before an impairment loss is recognised. The Group has assessed that the following changes will occur as a
result: • The new classification if applied
at 30 June 2018 would not have a significant impact on the accounting of
financial assets and financial liabilities. Investment in other entities
(equity instruments) will be designated at fair value through other
comprehensive income; and • The method of determining impairment of long-term and other
receivables will have to change to reflect the “expected credit loss” model.
Management has made an assessment of the magnitude of the changes to the
impairment model. This is not expected to have a significant impact. IFRS 15
Revenue from contracts with customers (Effective date 1 July 2018) The
standard contains a single model that applies to contracts with customers
superseding the revenue standard IAS 18Revenueand IAS 11Construction
contracts. It contains two approaches to recognising revenue: at a point in
time or over time. The model features a contract-based five-step analysis of
transactions to determine whether, how much and when revenue is recognised. The
standard also introduces new qualitative and quantitative disclosures related
to customer contracts and significant judgements applied. The Group has assessed that there will be no impact on adopting
IFRS 15, and revenue recognition will remain unchanged as follows: • Rand Refinery is assessed as being an agent, selling gold and
silver on behalf of the Group; •
Revenue is recognised on the date that control of gold and silver pass to the
buyer, which is the date on which Rand Refinery sells the gold on the Group’s
behalf. •
This is the same date as when significant risks and rewards passes under IAS 18Revenue. IFRS 16
Leases (Effective date 1 July 2019) The
standard sets out the principles for recognition, measurement, presentation and
disclosure of leases for both parties to a contract, i.e the customer
(“lessee”) and the supplier (“lessor”). The standard supersedes the current
leases standard IAS 17Leases.The standard has one model for lessees
which contains increased focus on the assessment of whether a transaction is a
lease.  Lessees will now recognise most leases on the statement of financial
position. No significant changes have been included for lessors. The
Group has commenced with analysing each contract included in the register of
contracts compiled by the procurement department in order to assess whether
these contain a lease and the impact that the standard will have on the Group.   8932


---

4
 REVENUEACCOUNTING
  POLICIES
  Revenue
  comprise the sale of gold bullion and silver bullion (produced as a
  by-product).
  Revenue
  is recognised to the extent that it is probable that economic benefits will
  flow to the Group and the amount of revenue can be reliably measured. Revenue
  is stated at the fair value of the consideration received or receivable,
  which is based on the afternoon London Bullion Market fixing price on the
  date the significant risks and rewards of ownership have been transferred to
  the buyer.
  The
  significant risks and rewards of ownership transfer to the buyer when Rand
  Refinery Limited (“Rand Refinery“), acting as an agent for the sale of all gold
  produced by the Group, delivers the gold to the buyer and the sales price is
  fixed, as evidenced by the certificate of sale.
 Rand Refinery performs the final refinement of all
gold produced. In exchange for this service, Rand Refinery receives a variable
refining fee plus fixed marketing and administration fees which is included in
operating costs. Amounts in R million
 2018
 2017
 2016Gold revenue
 2 486.4
 2 336.1
 2 429.7Silver revenue
 4.0
 3.8
 3.4Total revenue
 2 490.4
 2 339.9
 2 433.1
 MARKET
RISK Commodity price
sensitivity Combined impact of both US Dollar price of gold and
South African Rand/US Dollar exchange rate The Group's profitability and the cash flows are
primarily affected by changes in the market price of gold which is sold in US
Dollar and then converted to Rand. The Group did not enter into forward sales
of gold production, derivatives or other hedging arrangements to establish a
price in advance for the sale of future gold production during the year. A change of 10% in the average Rand gold
price received during the financial year would have increased/(decreased)
equity and profit/(loss) by the amounts shown below. This analysis assumes that
all other variables remain constant and specifically excludes the impact on
income tax. Amounts in R million
 2018
 2017
 201610% increase in the Rand gold price
 249.0
 234.0
 243.310% decrease in the Rand gold price
 (249.0)
 (234.0)
 (243.3)
 Price protection policy After
June 30, 2018 the Board approved Rand gold price protection to manage the
short-term liquidity risk that will arise from the anticipated increase in
borrowings to finance the development of Phase 1 of FWGR (refer to notes19 and 28).


---

5
 RESULTS FROM OPERATING ACTIVITIES5.1
 COST OF SALESAmounts in R million
 Note
 2018
 2017
 2016Cost of sales
 
 (2 347.7)
 (2 307.9)
 (2 236.8)Operating costs (a)
 
 (2 207.1)
 (2 109.3)
 (2 030.2)Movement in gold in process and finished stock
 
 24.5
 4.8
 (7.1)Depreciation
 9
 (168.0)
 (179.8)
 (180.2)Change in estimate of environmental rehabilitation
 10
 2.9
 (0.6)
 (19.3)Retrenchment costs
 
 -
 (23.0)
 -(a) Operating costsThe most significant components of operating costs include:Materials
 
 (784.6)
 (783.9)
 (719.5)Labour including short term incentives, excluding retrenchment
  costs
 
 (417.4)
 (351.0)
 (362.1)Electricity
 
 (369.0)
 (344.2)
 (325.4)Specialist service providers
 
 (326.9)
 (299.7)
 (282.4)Water
 
 (49.9)
 (71.1)
 (82.1)
 5.2
 OTHER INCOMEACCOUNTING POLICIES
  Income is recognised where it is probable that the economic
  benefits associated with a transaction will flow to the Group and they can be
  reliably measured.
  Other
  income is generally income earned from transactions outside the course of the
  Group’s ordinary activities and may include gains or losses on disposal of
  property, plant and equipment.
  Amounts in R million
 2018
 2017
 2016Profit on disposal of property, plant and equipment
 -
 12.9
 10.5-
 12.9
 10.5
 5.3
 ADMINISTRATION EXPENSES AND OTHER COSTSAmounts in R million
 Note
 2018
 2017
 2016Included in administration expenses and other costs is the
  following:Increase in Long-Term Incentive ("LTI") liability
 18.1
 (17.2)
 (10.0)
 (29.9)Transactions costs incurred related to the acquisition of FWGR
 28
 (9.0)
 -
 -Loss on disposal of property, plant and equipment
 
 (0.6)
 -
 -
 9132


---

6
 FINANCE INCOMEACCOUNTING
  POLICY
  Finance
  income includes interest received, growth in the environmental rehabilitation
  obligation funds and the unwinding of the long-term receivable.
  Amounts in R million
 Note
 2018
 2017
 2016Interest on loans and receivables
 12
 21.8
 23.6
 22.3Growth in environmental rehabilitation trust funds
 11, 23
 7.5
 7.5
 6.5Growth in reimbursive right
 11
 8.8
 8.9
 8.0Unwinding of long-term receivable
 24.2
 0.7
 -
 -38.8
 40.0
 36.8
 7
 FINANCE EXPENSEACCOUNTING
  POLICY
  Finance
  expenses comprise interest payable on financial instruments measured at amortised
  cost calculated using the effective interest method, unwinding of the
  provision for environmental rehabilitation, interest on finance leases and
  the fair value adjustment on the initial recognition of the long-term
  receivable.
  Amounts in R million
 Note
 2018
 2017
 2016Unwinding of provision for environmental rehabilitation
 10, 23
 (45.6)
 (46.5)
 (43.0)Fair value adjustment on initial recognition of long-term
  receivable
 24.2
 (8.8)
 -
 -Other finance expenses
 
 (4.0)
 (5.7)
 (4.6)(58.4)
 (52.2)
 (47.6)
 8
 EARNINGS PER SHAREAmounts in R million
 2018
 2017
 2016Basic earningsThe calculation of earnings per ordinary share is based on the
  following:Profit for the year
 6.5
 13.7
 61.9Reconciliation of weighted average number of
  ordinary shares to diluted weighted average number of ordinary sharesNumber of shares
 2018
 2017
 2016Weighted average number of ordinary shares in issue
 422 068 696
 422 068 696
 422 157 987Number of staff options
 -
 -
 34 075Diluted weighted average number of ordinary shares
 422 068 696
 422 068 696
 422 192 062SA cents per share
 2018
 2017
 2016Basic earnings per share
 1.5
 3.2
 14.7Diluted earnings per share
 1.5
 3.2
 14.7
 9232


---

9
 PROPERTY, PLANT AND
  EQUIPMENTSIGNIFICANT
  ACCOUNTING ASSUMPTIONS AND ESTIMATES
  Impairment
  of property, plant and equipment
  The
  recoverable amount of the cash-generating-unit is determined using discounted
  future cash flows based on the life-of-mine plan. These calculations require
  the use of assumptions and estimates and are inherently uncertain and could
  change materially over time.
  These
  assumptions and estimates include the market capitalisation of the Group,
  mineral reserves and resource estimates, production estimates, spot and
  future gold prices, foreign currency exchange rates, discount rates,
  estimates of costs to produce and future capital expenditure in determining
  the recoverable amount.
  At
  year-end, the market capitalisation of the Group was higher than its net
  asset value. The decline in the rand gold price was however considered as an
  impairment indicator.
  The Group
  has only one cash generating unit ("CGU") and calculated a
  recoverable amount based on updated life-of-mine plans, an average gold price
  of R550 411 per kilogram in year one escalating at an average of
  approximately 5.8% a year over the twelve-year life of mine, and a weighted
  average cost of capital of 11.2%.
  Sensitivity
  analysis
  The Group
  would begin impairment of the mining assets if the discount rate were to
  increase from 11.2% to 21.4%, or a 4.1% decrease in budgeted gold production
  or the rand gold price over the remaining life of the operation. The above sensitivities
  do not include a positive terminal value, relating to the disposal of any
  assets at the end of the useful life.
  Depreciation
  The
  calculation of the units-of-production rate of depreciation could be affected
  if actual production in the future varies significantly from current forecast
  production. This would generally arise when there are significant changes in
  any of the factors or assumptions used in estimating mineral reserves and
  resources. These factors could include:
  • changes
  in mineral reserves and resources;
  • the
  grade of mineral reserves and resources may vary from time to time;
  •
  differences between actual commodity prices and commodity price assumptions;
  •
  unforeseen operational issues at mine sites including planned extraction
  efficiencies; and
  • changes
  in capital, operating, mining processing and reclamation costs, discount
  rates and foreign exchange rates.
  Mineral
  reserves and resources estimates
  The Group
  is required to determine and report mineral reserves and resources in
  accordance with the South African Code for the Reporting of Exploration
  Results, Mineral Resources and Mineral Reserves (SAMREC Code).
  In order
  to calculate mineral reserves and resources, estimates and assumptions are
  required about a range of geological, technical and economic factors,
  including but not limited to quantities, grades, production techniques,
  recovery rates, production costs, transport costs, commodity demand,
  commodity prices and exchange rates.
  Estimating
  the quantity and/or grade of mineral reserves and resources requires the
  size, shape and depth of reclamation sites to be determined by analysing
  geological data such as the logging and assaying of drill samples. This
  process may require complex and difficult geological judgements and calculations
  to interpret the data.
  Because
  the assumptions used to estimate mineral reserves and resources change from
  period to period and because additional geological data is generated during
  the course of operations, estimates of mineral reserves and resources may
  change from period to period.
  Mineral
  reserves and resource estimates prepared by management are reviewed by an
  independent mineral resources expert.
  Changes
  in reported mineral reserves and resources may affect the Group’s
  life-of-mine plan, financial results and financial position in a number of
  ways including the following:
  • asset
  carrying values may be affected due to changes in estimated future cash
  flows;
  •
  depreciation charged to profit or loss may change where such charges are
  determined by the units-of-production method, or where the useful lives of
  assets change;
  •
  decommissioning, site restoration and environmental provisions may change
  where changes in estimated mineral reserves and resources affect expectations
  about the timing or cost of these activities; and
  • the
  carrying value of deferred tax assets and liabilities may change due to
  changes in estimates of the likely recovery of the tax benefits and charges.
  9332


---

9
 PROPERTY, PLANT AND
  EQUIPMENTcontinuedACCOUNTING
  POLICIES
  Recognition
  and measurement
  Property,
  plant and equipment comprise mine plant facilities and equipment, mine
  property and development (including mineral rights) and exploration assets.
  These assets (excluding exploration assets) are initially measured at cost,
  where after they are measured at cost less accumulated depreciation and
  accumulated impairment losses. Exploration assets are initially measured at
  cost, where after they are measured at cost less impairment losses.
  Cost
  includes expenditure that is directly attributable to the acquisition or
  construction of the asset, as well as the costs of dismantling and removing
  an asset and restoring the site on which it is located. Subsequent costs are
  included in the asset’s carrying amount or recognised as a separate asset, as
  appropriate, only when it is probable that future economic benefits
  associated with the item will flow to the Group and the cost of the item can
  be measured reliably. Exploration and evaluation costs are capitalised as
  exploration assets on a project-by-project basis, pending determination of
  the technical feasibility and commercial viability of the project.
  Depreciation
  Depreciation
  of mine plant facilities and equipment, as well as mining property and
  development (including mineral rights) are calculated using the units of
  production method which is based on the life-of-mine of each site. The
  life-of-mine is primarily based on proved and probable mineral reserves and
  may include some resources. It reflects the estimated quantities of
  economically recoverable gold that can be recovered from reclamation sites
  based on the gold price estimated at the end of the financial year. Changes
  in the life-of-mine will impact depreciation on a prospective basis. The
  life-of-mine is prepared using a methodology that takes account of current
  information to assess the economically recoverable gold from specific
  reclamation sites and includes the consideration of historical experience.
  The depreciation method, estimated useful lives and residual values are
  reassessed annually and adjusted if appropriate. Any changes to useful lives
  may affect prospective depreciation rates and asset carrying values. The current
  estimated useful lives for mine property and development, as well as mine
  plant facilities and equipment are based on the life-of-mine of each site,
  currently between four (2017: two; 2016: six) and 12 (2017: 12; 2016: 10)
  years.
  Impairment
  Non-financial
  assets
  The
  carrying amounts of property, plant and equipment are reviewed at each
  reporting date to determine whether there is any indication of impairment, or
  whenever events or changes in circumstances indicate that the carrying amount
  may not be recoverable. If any such indication exists, the asset’s
  recoverable amount is estimated. For the purposes of assessing impairment,
  assets are grouped at the lowest levels for which there are separately
  identifiable cash flows (CGUs). Each metallurgical plant or combination of
  plants that, together with its deposition facility, is capable of operating
  independently is considered to be a CGU.
  The
  recoverable amount of an asset or CGU is the greater of its value in use and
  its fair value less costs to sell. In assessing value in use, the estimated
  future cash flows are discounted to their present value using a pre-tax
  discount rate that reflects current market assessments of the time value of money
  and the risks specific to the asset. An impairment loss is recognized in
  profit or loss if the carrying amount of an asset or CGU exceeds its
  recoverable amount.
  Exploration
  assets
  Exploration
  assets are assessed for impairment if facts and circumstances suggest that
  the carrying amount exceeds the recoverable amount. When a license is
  relinquished or a project is abandoned, the related costs are recognised in
  profit or loss immediately.
  Leased
  assets
  Upon
  initial recognition, the leased asset are measured at amounts equal to the
  lower of the fair value of the leased asset and the present value of the
  minimum lease payments. Subsequent to initial recognition, the asset is
  accounted for in the same manner as owned property, plant and equipment.
  Finance
  lease payments
  Minimum
  lease payments are apportioned between the finance charge and the reduction
  of the outstanding liability. The finance charge is allocated to each period
  during the lease term so as to produce a constant periodic rate of interest
  on the remaining balance of the liability.
  9432


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9
 PROPERTY, PLANT AND EQUIPMENTcontinuedAmounts in R million
 Note
 Mine plant
  facilities and equipment (a)
 Mine
  property and development
 Exploration
  assets
 Total30 June 2018Cost
 
 1 689.5
 1 264.5
 77.3
 3 031.3Opening balance
 
 1 667.6
 1 230.0
 77.4
 2 975.0Additions
 
 82.5
 40.2
 3.4
 126.1Disposals
 
 (56.3)
 (17.4)
 -
 (73.7)Change in estimate of decommissioning asset
 10
 (4.3)
 11.7
 (3.5)
 3.9Accumulated depreciation and impairment
 
 (815.4)
 (753.5)
 (9.7)
 (1 578.6)Opening balance
 
 (760.8)
 (706.9)
 (9.7)
 (1 477.4)Depreciation
 5.1
 (104.3)
 (63.7)
 -
 (168.0)Disposals
 
 49.7
 17.1
 -
 66.8Carrying value
 
 874.1
 511.0
 67.6
 1 452.730 June 2017Cost
 
 1 667.6
 1 230.0
 77.4
 2 975.0Opening balance
 
 1 519.5
 1 310.4
 74.9
 2 904.8Additions
 
 37.6
 65.3
 13.4
 116.3Disposals
 
 (2.8)
 (3.9)
 -
 (6.7)Change in estimate of decommissioning asset
 10
 27.0
 (60.9)
 (0.5)
 (34.4)Transfers between classes of property, plant and equipment
 
 92.1
 (81.7)
 (10.4)
 -Transferred from non-current assets held for sale
 23
 -
 0.8
 -
 0.8Transferred to inventory
 
 (5.8)
 -
 -
 (5.8)Accumulated depreciation and impairment
 
 (760.8)
 (706.9)
 (9.7)
 (1 477.4)Opening balance
 
 (598.7)
 (693.2)
 (12.4)
 (1 304.3)Depreciation
 5.1
 (108.7)
 (71.1)
 -
 (179.8)Disposals
 
 2.8
 3.9
 -
 6.7Transfers between classes of property, plant and equipment
 
 (56.2)
 53.5
 2.7
 -Carrying value
 
 906.8
 523.1
 67.7
 1 497.6
 (a)  Leased plant and
equipment Ergo leases
temporary power generation equipment with a carrying value of R13.6 million
(2017: R16.8 million) from Aggreko Energy Rental Proprietary Limited under a
finance lease with an outstanding balance of R14.0 million (2017: R16.8 million) which is included
in the consolidated finance lease obligation of R14.7 million (2017: R16.8
million). The finance lease has an effective interest rate of 17.9% and is repayable R3.2 million in 2019 and R10.8 million in 2020, the
latter including R9.9 million for the option to
acquire the leased equipment at the end of the lease term. Interest is payable
R2.0 million in 2019 and R0.4 million in 2020. CONTRACTUAL COMMITMENTSAmounts in R million
 2018
 2017Contracted for but not provided for in the consolidated
  financial statements
 32.7
 11.2The
  contractual commitments at June 30, 2018 includes orders placed amounting to
  R29.2 million related to the development of phase 1 of FWGR.Capital expenditure is financed from existing cash resources and
  cash generated from operations, with the exception of specific growth
  projects for which the capital requirements are considered on a
  project-by-project basis.
 9532


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10
 PROVISION FOR
  ENVIRONMENTAL REHABILITATIONSIGNIFICANT
  ACCOUNTING ASSUMPTIONS AND ESTIMATES
  Estimates
  of future environmental rehabilitation costs are determined with the
  assistance of an independent expert and are based on the Group’s
  environmental management plans which are developed in accordance with
  regulatory requirements, the life-of-mine plan and the planned method of
  rehabilitation which is influenced by developments in trends and technology.
  
  An average
  discount rate of 8.5% (2017: 8.8%), average inflation rate of 5.7% (2017:
  5.9%) and the discount periods as per the expected life-of-mine were used in
  the calculation of the estimated net present value of the rehabilitation
  liability.
  ACCOUNTING
  POLICIES
  The net
  present value of the estimated rehabilitation cost as at reporting date is
  provided for in full. These estimates are reviewed annually and are
  discounted using a pre-tax risk-free rate that is adjusted to reflect the
  current market assessments of the time value of money and the risks specific
  to the obligation.
  
  Annual
  changes in the provision consist of financing expenses relating to the change
  in the present value of the provision and inflationary increases in the
  provision, as well as changes in estimates.
  
  The
  present value of dismantling and removing the asset created before production
  commenced (decommissioning liabilities) are capitalised to property, plant
  and equipment against an increase in the rehabilitation provision. If a
  decrease in the liability exceeds the carrying amount of the asset, the
  excess is recognised in profit or loss. If the asset value is increased and
  there is an indication that the revised carrying value is not recoverable, an
  impairment test is performed in accordance with the accounting policy dealing
  with impairments of property, plant and equipment. Over time, the liability
  is increased to reflect an interest element, and the capitalised cost is
  depreciated over the life of the related asset. Cash costs incurred to
  rehabilitate these disturbances are charged to the provision and are
  presented as investing activities in the statement of cash flows.
  
  The
  present value of environmental rehabilitation costs relating to activities
  after production commenced (restoration liabilities) as well as changes
  therein are expensed as incurred and presented as operating costs. Cash costs
  incurred to rehabilitate these disturbances are presented as operating
  activities in the statement of cash flows.The cost of ongoing rehabilitation
  is recognised in profit or loss as incurred.
  Amounts in R million
 Note
 2018
 2017Opening balance
 
 531.7
 522.9Unwinding of provision
 7
 45.6
 45.3Change in estimate of environmental rehabilitation recognised in
  profit or loss
 5.1
 (2.9)
 0.6Change in estimate of environmental rehabilitation recognised to
  decommissioning asset
 9
 3.9
 (34.4)Environmental rehabilitation payments
 
 (24.9)
 (19.5)To reduce decommissioning liabilities
 
 (21.5)
 (11.6)To reduce restoration liabilities
 13
 (3.4)
 (7.9)Transferred from non-current liabilities held for sale
 23
 -
 16.8Closing balance
 
 553.4
 531.7Environmental rehabilitation payments to reduce the liability
 
 (24.9)
 (19.5)Ongoing rehabilitation expenditure *
 21
 (26.7)
 (22.4)Total cash spent on environmental rehabilitation
 
 (51.6)
 (41.9)* The
  Group also performs ongoing environmental rehabilitation arising from its
  current activities concurrently with production. These costs do not represent
  a reduction of the above liability and are expensed as operating costs.
 Gross cost to
rehabilitate The
Group estimates that, based on current environmental and regulatory
requirements, the total undiscounted rehabilitation cost is approximately R670.4
million (2017: R639.5 million). 9632


---

11
 INVESTMENTS IN
  REHABILITATION OBLIGATION FUNDSACCOUNTING
  POLICIES
  Cash
  and cash equivalents in environmental rehabilitation trust funds
  Cash and
  cash equivalents in environmental rehabilitation trust funds comprise
  low-risk, interest-bearing cash and cash equivalents and are non-derivative
  financial assets categorised as loans and receivables.
  Reimbursive
  right for environmental rehabilitation guarantees
  Funds held
  in the cell captive that secure the environmental rehabilitation guarantees
  issued are recognised as a right to receive a reimbursement and is measured
  at the lower of the amount of the consolidated environmental rehabilitation
  liability recognised and the consolidated fair value of the fund assets.
  Changes in
  the carrying value of the fund assets, other than those resulting from
  contributions and payments, are recognised in finance income.
 Funding of environmental rehabilitation activities(refer note 10) Ongoing rehabilitation expenditure and environmental
rehabilitation payments to reduce the environmental rehabilitation obligations
are mostly funded by cash generated from operations. In addition, contributions
have been made to an environmental rehabilitation trust and a cell captive for
the sole use of future environmental rehabilitation payments. Guardrisk Insurance Company Limited
("Guardrisk") issued guarantees amounting to R427.3 million (2017:
R427.3 million) to the Department of Mineral Resources ("DMR") on
behalf of DRDGOLD related to the environmental obligations. The funds in the
cell captive serves as collateral for these guarantees.  Amounts in R million
 Note
 2018
 2017Cash and cash equivalents in environmental
  rehabilitation trust funds
 
 118.0
 110.5Opening balance
 
 110.5
 93.8Transferred from non-current assets held-for-sale
 23
 -
 9.9Growth
 6
 7.5
 6.8Reimbursive right for environmental
  rehabilitation guarantees
 
 126.0
 117.2Opening balance
 
 117.2
 108.3Growth
 6
 8.8
 8.9244.0
 227.7
 CREDIT
RISK The Group is exposed to credit risk on the total
carrying value of the investments held in the environmental rehabilitation
trust funds. The Group manages its exposure to credit risk by
diversifying these investments across a number of major financial institutions,
as well as investing funds in low-risk, interest-bearing cash and cash
equivalents. MARKET
RISK Interest
rate risk A change of 100 basis points (bp) in
interest rates at the reporting date would have increased/(decreased) equity
and profit/(loss) by the amounts shown below. This analysis assumes that all
other variables, in particular the balance of the funds, remain constant. The
analysis excludes income tax. Amounts in R million
 
 2018
 2017100bp increase
 
 1.2
 1.1100bp (decrease)
 
 (1.2)
 (1.1)
 FAIR
VALUE OF FINANCIAL INSTRUMENTS The fair value of the cash and cash equivalents in the
environmental rehabilitation trust funds approximate their carrying value due
to their short-term maturities. 9732


---

12
 CASH AND CASH
  EQUIVALENTSACCOUNTING
  POLICIES
  Cash and
  cash equivalents are non-derivative financial assets categorised as loans and
  receivables and comprise cash on hand, demand deposits, and highly liquid
  investments which are readily convertible to known amounts of cash and
  subject to insignificant risk of changes in value.
  
  Cash and
  cash equivalents are initially measured at fair value. Subsequent to initial
  recognition, cash and cash equivalents are measured at amortised cost, which
  is equivalent to their fair value.
  Amounts in R million
 Note
 2018
 2017Included in cash and cash equivalents is restricted cash
  relating to:- Cash (including interest) held in escrow relating to the
  electricity tariff dispute with Ekurhuleni Metropolitan Municipality
  ("Municipality")
 25
 114.2
 92.7- Environmental and other guarantees issued by the Standard
  Bank of South Africa Limited
 
 17.2
 16.1Interest relating to cash and cash equivalents
 6
 21.8
 23.6
 CREDIT
RISK The Group is exposed to credit risk on the total
carrying value of its cash and cash equivalents.The Group manages its exposure
to credit risk by investing cash and cash equivalents across a number of major
financial institutions, considering the credit ratings of these financial
institutions. MARKET
RISK Interest
rate risk A
change of 100 basis points (bp) in
interest rates at the reporting date would had increased/(decreased) equity and
profit/(loss) by the amounts shown below. This analysis assumes that all other
variables, in particular the cash balance and foreign currency rates, remain
constant. The analysis excludes income tax. Amounts in R million
 
 2018
 2017100bp increase
 
 3.0
 2.5100bp (decrease)
 
 (3.0)
 (2.5)
 Foreign currency risk US Dollars received on settlement of the trade debtors
are exposed to fluctuations in the US Dollar/South African Rand exchange rate
until it is converted to South African Rands. The Group was not exposed to any fluctuations in the
US Dollar/South African Rand exchange rate on any US Dollars at the current or
previous reporting date as all the US Dollars held were converted to South
African Rands. Foreign
denominated cash is held in a foreign currency bank account accruing negligible
interest and is usually converted to South African Rand on the day of receipt.
Foreign cash is therefore not exposed to interest rate risk. FAIR
VALUE OF FINANCIAL INSTRUMENTS Cash and cash
equivalents The fair value of cash
and cash equivalents approximate their carrying value due to their short-term
maturities. 9832


---

13
 CASH GENERATED BY OPERATIONSAmounts in R million
 Note
 2018
 2017
 2016Profit/(loss) before tax
 
 32.4
 (36.7)
 108.8Adjusted forDepreciation
 9
 168.0
 179.8
 180.2Movement in gold in process and finished stock
 5.1
 (24.5)
 (4.8)
 7.1Change in estimate of environmental rehabilitation
 10, 23
 (2.9)
 0.6
 19.3Environmental rehabilitation payments
 10, 23
 (3.4)
 (7.9)
 (11.2)Increase in long-term incentive liability
 18.1
 17.2
 10.0
 29.9Profit on disposal of property, plant and equipment
 5.2
 -
 (12.9)
 (10.5)Loss on disposal of property, plant and equipment
 5.3
 0.6
 -
 -Reversal of accrual
 
 -
 -
 (22.7)Finance income
 6
 (38.8)
 (40.0)
 (36.8)Finance expense
 7
 58.4
 52.2
 47.6Other non-cash items
 
 1.3
 (1.0)
 4.6Operating cash flows before working capital changes
 
 208.3
 139.3
 316.3Working capital changes
 
 14.6
 (117.8)
 81.9Change in trade and other receivables
 
 22.2
 (57.6)
 33.7Change in long-term receivable
 24.2
 (27.4)
 -
 -Change in inventories
 
 (28.2)
 (14.8)
 1.0Change in trade and other payables and employee benefits
 
 48.0
 (45.4)
 47.2Cash generated by operations
 
 222.9
 21.5
 398.2
 14
 TRADE AND OTHER
  RECEIVABLESACCOUNTING
  POLICIES
  Trade
  and other receivables, excluding Value Added Tax and prepayments, are
  non-derivative financial assets categorised as loans and receivables.
  These
  assets are initially measured at fair value plus directly attributable
  transaction costs. Subsequent to initial recognition, they are measured at
  amortised cost using the effective interest method less any impairment losses.
  The Group
  derecognises a financial asset when the contractual rights to the cash flows
  from the asset expire, or it transfers the rights to receive the contractual
  cash flows in a transaction in which substantially all of the risks and
  rewards of ownership of the financial asset are transferred, or it neither
  transfers nor retains substantially all of the risks and rewards of ownership
  and does not retain control over the transferred asset. Any interest in such
  derecognised financial assets that is created or retained by the Group is
  recognised as a separate asset or liability.
  
  Impairment
  A
  financial asset not classified at fair value through profit or loss is
  assessed at each reporting date to determine whether there is any objective
  evidence (e.g. delinquency of a debtor and indications that a debtor will
  enter bankruptcy) that it is impaired. A financial asset is considered to be
  impaired if objective evidence indicates that one or more events have had a
  negative effect on the estimated future cash flows of that asset.
  
  Any
  impairment losses are recognised in the statement of profit or loss.
 Trade
receivables relate to gold sold on the bullion market by Rand Refinery in its
capacity as an agent. Settlement is received two working days from gold sold
date.  Amounts in R million
 
 
 
 2018
 2017Trade receivables
 
 
 
 0.6
 34.5Value Added Tax
 
 
 
 46.8
 50.8Other receivables
 
 
 
 40.8
 35.7Prepayments
 
 
 
 12.2
 3.0Allowance for impairment
 
 
 
 (9.2)
 (9.7)91.2
 114.3
 9932


---

14
 TRADE AND OTHER RECEIVABLEScontinuedCREDIT RISKThe Group
  is exposed to credit risk on the total carrying value of its trade
  receivables and other receivables excluding Value Added Tax and prepayments.The Group
  manages its exposure to credit risk on trade receivables by maintaining a
  short term cycle to settlement of 2 working days. The Group manages its
  exposure to credit risk on other receivables by dealing with a number of
  counterparties, ensuring that these counterparties are of good credit
  standing and transacting on a secured or cash basis where considered
  necessary. Receivables are regularly monitored and assessed for
  recoverability.Ageing of
  trade receivables and other receivables:Amounts in R million
 2018
 2017Receivables that are past due but not impaired at 30 June
 15.3
 10.4Receivables that are past due and impaired at 30 June
 9.2
 9.7
 Management
believes that the unimpaired amounts that are past due by more than 30 days are
still collectible in full, based on historical payment behaviour. Impairments
were raised due to the uncertainty around the recoverability and timing of the
expected cash flows. Movement in the allowance for impairment in respect of
trade and other receivables during the year was as follows: Amounts in R million
 2018
 2017Balance at 1 July
 (9.7)
 (11.1)Net of impairments raised and bad debt recovered
 0.5
 1.4Balance at 30 June
 (9.2)
 (9.7)
 MARKET
RISK Interest
rate risk Trade
and other receivables do not earn interest and are therefore not subject to interest
rate risk. Foreign currency
risk All gold sales during the year ended June 30, 2018,
and thus all trade receivables, were denominated in US Dollars and sold at spot
rates and were therefore exposed to fluctuations in the US Dollar/South African
Rand exchange rate. No hedges were entered into.  Figures in USD million
 2018
 2017Foreign denomination of trade receivables at June 30 *
 -
 2.7* Foreign trade receivables as at June 30, 2018 represents less
  than USD0.1 millionA 10%
  strengthening of the Rand against the US Dollar at 30 June would have
  increased/(decreased) equity and profit/(loss) by the amounts shown below.
  This analysis assumes that all other variables remain constant.Amounts in R million
 2018
 2017Strengthening of the Rand against the US Dollar #
 -
 (3.5)Weakening of the Rand against the US Dollar #
 -
 3.5# The increase/(decrease) in equity and profit/(loss) for the
  year ended June 30, 2018 would have been less than R0.1 million
 FAIR VALUE
OF FINANCIAL INSTRUMENTS The fair value of
trade and other receivables approximate their carrying value due to their
short-term maturities. 10032


---

15
 TRADE AND OTHER
  PAYABLESACCOUNTING
  POLICIES
  Trade
  and other payables, excluding payroll accruals, accrued leave pay and
  provision for performance based incentives, are non-derivative financial liabilities
  categorised as financial liabilities measured at amortised cost.
  These
  liabilities are initially measured at fair value plus directly attributable
  transaction costs. Subsequent to initial recognition, they are measured at
  amortised cost using the effective interest method. The Group derecognises a
  financial liability when its contractual rights are discharged, or cancelled
  or expire.
  Short-term
  employee benefits are expensed as the related service is provided. A
  liability is recognised for the amount expected to be paid if the Group has a
  present legal or constructive obligation to pay this amount as a result of
  past service provided by the employee and the obligation can be estimated
  reliably.
   Amounts in R million
 
 2018
 2017Trade payables and accruals
 
 227.0
 200.9Accrued leave pay
 
 32.9
 30.8Provision for performance based incentives
 
 24.7
 2.2Payroll accruals
 
 18.7
 17.9303.3
 251.8Interest relating to trade payables and accruals included in
  profit or loss
 
 (1.5)
 (2.7)
 LIQUIDITY RISK Trade payables and
accruals are expected to be settled within 12 months from reporting date. FAIR VALUE OF
FINANCIAL INSTRUMENTS The fair value of
trade payables and accruals approximate their carrying value due to their
short-term maturities.  16
 INVENTORIESACCOUNTING
  POLICIES
  Gold in
  process is stated at the lower of cost and net realisable value. Costs are
  assigned to gold in process on a weighted average cost basis. Costs comprise
  all costs incurred to the stage immediately prior to smelting, including
  costs of extraction and processing as they are reliably measurable at that
  point. Gold bullion is stated at the lower of cost and net realisable value.
  Selling and general administration costs are excluded from inventory
  valuation.
  Consumable
  stores are stated at cost less allowances for obsolescence. Cost of
  consumables is based on the weighted average cost principle and includes
  expenditure incurred in acquiring inventories and bringing them to their
  existing location and condition.
  Net
  realisable value is the estimated selling price in the ordinary course of
  business, less the estimated cost of completion and selling expenses.
  Amounts in R million
 
 2018
 2017Consumable stores
 
 129.0
 101.9Gold in process
 
 66.2
 55.1Finished stock - Gold Bullion
 
 37.8
 23.3Total inventories
 
 233.0
 180.3Inventory carried at net realisable value
  includes:Gold in process
 
 -
 45.3Finished stock - Gold Bullion
 
 -
 19.3Write down to net realisable value included in movement in gold
  in process and finished stock
 
 -
 10.2
 10132


---

17
 INCOME TAXSIGNIFICANT
  ACCOUNTING ASSUMPTIONS AND ESTIMATES
  Management
  periodically evaluates positions taken where tax regulations are subject to
  interpretation. This includes the treatment of Ergo as a single mining
  operation pursuant to the relevant ring-fencing legislation.
  The
  deferred tax liability is calculated by applying a forecast weighted average
  tax rate that is based on a prescribed formula. The calculation of the
  forecast weighted average tax rate requires the use of assumptions and
  estimates and are inherently uncertain and could change materially over time.
  These assumptions and estimates include expected future profitability and
  timing of the reversal of the temporary differences. Due to the forecast
  weighted average tax rate being based on a prescribed formula that increases
  the effective tax rate with an increase in forecast future profitability, andvice versa, the tax rate can vary significantly year on year and can
  move contrary to current period financial performance.
  A
  100 basis points increase in the effective tax rate will result in an
  increase in the net deferred tax liability at June 30, 2018 of approximately
  R8.0 million (2017: R7.4 million; 2016: R8.1 million).
  The
  assessment of the probability that future taxable profits will be available
  against which the tax losses and unredeemed capital expenditure can be
  utilised requires the use of assumptions and estimates and are inherently
  uncertain and could change materially over time.
  Capital
  expenditure is assessed by the South African Receiver of Revenue when it is
  redeemed against taxable mining income rather than when it is incurred. A
  different interpretation by the South African Receiver of Revenue regarding
  the deductibility of these capital allowances may therefore become evident subsequent
  to the year of assessment when the capital expenditure is incurred.
  ACCOUNTING
  POLICIES
  Income
  tax expense comprises current and deferred tax. Each company is taxed as a
  separate entity and tax is not set-off between the companies.
  Current
  tax
  Current
  tax comprise the expected tax payable or receivable on the taxable income or
  loss for the year and any adjustment on tax payable or receivable in respect
  of the previous year is recognised in profit or loss except to the extent
  that it relates to items recognised directly in equity or OCI. The current
  tax charge is calculated on the basis of the tax laws enacted or
  substantively enacted at the reporting date.
  Deferred
  tax
  Deferred
  tax is recognised in respect of temporary differences between the carrying
  amounts and the tax bases of assets and liabilities. Deferred tax is not
  recognised on the initial recognition of assets or liabilities in a
  transaction that is not a business combination and that affects neither
  accounting nor taxable profit.
  Deferred
  tax assets relating to unutilised tax losses and unutilised capital
  allowances are recognised to the extent that it is probable that future
  taxable profits will be available against which the unutilised tax losses and
  unutilised capital allowances can be utilised. The recoverability of these
  assets is reviewed at each reporting date and adjusted if recovery is no
  longer probable.
  Deferred
  tax related to gold mining income is measured at a forecast weighted average
  tax rate that is expected to be applied to temporary differences when they
  reverse, using tax rates enacted or substantially enacted at the reporting
  date.17.1
 INCOME TAX EXPENSE
 Tax on gold mining
income is determined based on a formula: Y = 34 - 170/X where Y is the
percentage rate of tax payable and X is the ratio of taxable income, net of any
qualifying capital expenditure that bears to gold mining income derived,
expressed as a percentage. Non-mining income, which consists primarily of
interest accrued, is taxed at a standard rate of 28%. All mining capital
expenditure is deducted in the year it is incurred to the extent that it does
not result in an assessed loss. Capital expenditure not deducted from mining
income is carried forward as unutilised capital allowances to be deducted from
future mining income. 
    10232


---

17
 INCOME TAXcontinued17.1
 INCOME TAX EXPENSEcontinuedAmounts in R million
 2018
 2017
 2016Mining tax
 (23.2)
 54.2
 (46.9)Non-mining tax
 (2.7)
 (3.8)
 -(25.9)
 50.4
 (46.9)Comprising:Current tax  - current year
 (6.4)
 (1.9)
 (0.5)Current tax  - prior year
 -
 -
 (5.1)Deferred tax  - current year
 (19.5)
 53.4
 (42.1)Deferred tax  - prior year
 -
 (1.1)
 0.8(25.9)
 50.4
 (46.9)Tax reconciliationMajor items causing the Group's income tax expense to differ
  from the statutory rate were:Tax on net (profit)/loss before tax at the South African
  corporate tax rate of 28%
 (9.0)
 10.3
 (30.5)Rate adjustment to reflect the actual realised company tax rates
 3.5
 (7.9)
 4.4Deferred tax rate adjustment (a)
 (12.8)
 37.5
 (21.7)Non-deductible expenditure (b)
 (9.8)
 (1.8)
 (1.8)Utilisation of tax losses for which deferred tax assets were
  previously unrecognised (c)
 2.6
 5.9
 7.5Current year tax losses for which no deferred tax was recognised
 (0.8)
 (0.3)
 -Exempt income and other non-taxable income
 -
 5.4
 -Tax incentives
 0.4
 0.2
 0.7Other temporary differences
 -
 -
 (1.2)Over/(under) provided in prior periods
 -
 1.1
 (4.3)Income tax
 (25.9)
 50.4
 (46.9)
 (a) Deferred tax rate adjustment The forecast weighted average deferred tax rate increased from 18.6% to 20.3% as a result of an increase
in forecast profitability of Ergo(2017: decreased
from 23.1% to 18.6% due to the decrease in forecast
profitability of Ergo; 2016: increased from 20.1% to 23.1% due to the increase
in forecast profitability of Ergo). (b)Non-deductible expenditure The most significant non-deductible expenditure incurred by the
Group includes: ·R9.0 million transactions costs incurred related to the
acquisition of the WRTRP Assets; ·R8.8 million fair value adjustment on initial recognition of the
long-term receivable; ·R7.5 million net operating cost related to Ergo Business
Development Academy Not for Profit Company that is not deductible as it is
exempt from income tax; and ·R6.0 million expenditure that is capital in nature. (c) Utilisation of tax losses for
which deferred tax assets were previously unrecognised Group entities that are not expected to generate recurring taxable
income, and therefore have unrecognised deferred tax assets, generated taxable
income during the year ended June 30, 2018 resulting in the utilisation of
unrecognised losses. 10332


---

17
 INCOME TAXcontinued17.2
 DEFERRED TAXDeferred
  tax assets and liabilities relate to the following:Amounts in R million
 2018
 2017Deferred tax assetProvisions
 8.7
 5.08.7
 5.0Deferred tax liabilityProperty, plant and equipment
 (261.5)
 (223.8)Provisions, including rehabilitation provision
 95.0
 80.2Other temporary differences (1)
 2.8
 3.1(163.7)
 (140.5)Net deferred mining and income tax liability
 (155.0)
 (135.5)Movement in the net deferred tax liability is as follows:Amounts in R million
 2018
 2017Opening balance
 (135.5)
 (187.9)Recognised in profit or loss
 (19.5)
 52.4Property, plant and equipment
 (37.7)
 83.1Provisions, including rehabilitation provision
 18.5
 (29.4)Other temporary differences (1)
 (0.3)
 (1.3)Closing balance
 (155.0)
 (135.5)(1) Includes the temporary differences on the
  finance lease obligation.
 Deferred tax assets have not been recognised in respect of the
  following:Amounts in R million
 2018
 2017Tax losses
 37.3
 20.5Unredeemed capital expenditure
 272.9
 272.9Capital losses
 330.0
 325.2Deferred
  tax assets have not been recognised for Group entities that are not expected
  to generate future taxable profits against which the tax losses, unredeemed
  capital expenditure and capital losses can be utilised.
 10432


---

18
 EMPLOYEE BENEFITSACCOUNTING
  POLICIES
  Cash-settled
  share-based payments (“Long-Term Incentive” or “LTI”)
  Cash-settled
  share-based payments are measured at fair value and remeasured at each
  reporting date to reflect the potential outflow of cash resources to settle
  the liability, with a corresponding adjustment in profit or loss. Vesting
  assumptions for non-market conditions are reviewed at each reporting date to
  ensure they reflect current expectations.
  Post-retirement
  medical benefit
  The
  Group's net obligation in respect of long term employee benefits is the
  amount of future benefit that employees have earned in return for their service
  in the current and prior periods. That benefit is discounted to determine the
  present value. Remeasurements are recognised in profit or loss in the period
  in which they arise.
  Amounts in R million
 Note
 2018
 2017Non-current employee benefits
 
 40.6
 39.0Liability for long term incentive scheme
 18.1
 31.9
 30.7Liability for post-retirement medical benefits*
 
 8.7
 8.3Current employee benefits
 
 13.2
 -Liability for long term incentive scheme
 18.1
 13.2
 -53.8
 39.0* Unfunded medical aid benefit plan
 18.1
LIABILITY FOR LONG TERM INCENTIVE SCHEME Terms of the November 2015 grant made under the
DRDGOLD Group's amended long term incentive  scheme are: • The scheme has a finite term of 5 years and thus no top-up awards
are made when the shares vest; •The phantom shares
are issued at an exercise price of nil and will vest in 3 tranches: 20%, 30% and 50% on the 3rd, 4th
and 5th anniversaries respectively, subject to individual service
and performance conditions being met; and • The phantom shares will be settled at the 7
day volume weighted average price ("VWAP") of the DRDGOLD share. Amounts in R million
 
 
 
 Note
 2018
 2017Movement in the total liabilityOpening balance
 
 
 
 
 30.7
 30.3Increase in long-term incentive liability
 
 5.3
 17.2
 10.0Vested and paid
 
 
 
 
 (2.8)
 (9.6)Total liability for long-term incentive scheme
 
 45.1
 30.7The total liability for long-term incentive scheme is expected
  to be settled as follows:
 45.1
 30.7Within 12 months after reporting date
 13.2
 -After 12 months after reporting date
 31.9
 30.7Reconciliation of outstanding phantom shares
 2018
 2017Weighted
 
 Weightedaverage
 
 averageShares
 price
 Shares
 priceNumber
 R per
  share
 Number
 R per
  shareOpening balance
 
 
 21 144 534
 
 23 169 191Vested and paid
 
 
 (955 067)
 2.93
 (1 502 747)
 6.39Forfeited/lapsed
 
 
 -
 
 (521 910)Closing balance
 
 
 20 189 467
 
 21 144 534Ageing of outstanding phantom shares:
 30 June
  2019
 30 June
  2020
 30 June
  2021
 TotalGranted November 2015
 
 
 4 037 893
 6 056 840
 10 094 734
 20 189 467
  10532


---

18 EMPLOYEE BENEFITScontinued 18.1 LIABILITY FOR LONG TERM
INCENTIVE SCHEMEcontinued Fair value The fair value of the liability for the long-term
incentive scheme is mostly influenced by the DRDGOLD Limited share price. Other
inputs influencing the fair value are the forward dividend yield and estimates
of staff retention and performance conditions. The inputs most significantly
influencing the measurement of the fair values are as follows: 2018
 2017
 Grant date7 day VWAP of the DRDGOLD Limited share
 
 3.71
 4.23
 2.26Annualised forward dividend yield
 
 1.8%
 0.7%
 4.3%
 18.2
TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL Interests in contracts None of the directors, officers or major shareholders of DRDGOLD
or, to the knowledge of DRDGOLD’s management, their families, had any interest,
direct or indirect, in any transaction during the year ended June 30, 2018 or
the preceding financial years, or in any proposed transaction which has
affected or will materially affect DRDGOLD or its subsidiaries. None of the
directors or officers of DRDGOLD or any associate of such director or officer
is currently or has been at any time during the past financial year materially
indebted to DRDGOLD. Key management personnel remunerationAmounts in R million
 Note
 2018
 2017
 2016- Board fees paid
 
 5.6
 5.0
 3.7- Salaries paid
 
 53.6
 52.9
 51.5- Short term incentives relating to this cycle
 
 22.5
 -
 33.8- Long term incentives paid during this cycle
 18.1
 2.8
 9.6
 3.9- Pre-tax gain on share option exercised
 
 -
 -
 1.784.5
 67.5
 94.6
 19   CAPITAL
MANAGEMENT The
primary objective of managing the Group's capital is to ensure that there is
sufficient capital available to support the funding requirements of the Group,
including capital expenditure, in a way that optimises the cost of capital,
ensures that the Group remains in a sound financial position and matches the
Group's strategy. At
June 30, 2018 the Group had no external debt in line with its aim for the
existing operations to remain unleveraged. All funding requirements during the
past financial year have been financed by cash resources and cash generated
from operations. The
Group considers the appropriate capital management strategy for specific growth
projects as and when required. Lease
arrangements that are not in the legal form of a finance lease, but is
accounted for as such based on its terms and conditions, are not considered to
be debt. Financing the development
of Phase 1 of FWGR Subsequent
to the acquisition of FWGR on July 31, 2018 (refer note 28), a Revolving Credit
Facility amounting to R300 million was secured with ABSA Bank Limited (acting
through its Corporate and Investment Banking division) to finance the
development of Phase 1 of FWGR, replacing the R100 million overdraft facility
that was in place during the year ended June 30, 2018. Price protection policy After
June 30, 2018 the Board approved Rand gold price protection to manage the
short-term liquidity risk that will arise from the anticipated increase in
borrowings to finance the development of Phase 1 of FWGR. 10632


---

20
 EQUITYACCOUNTING
  POLICIES
  Ordinary
  share capital
  Ordinary
  shares and the cumulative preference shares are classified as equity.
  Incremental costs directly attributable to the issue of ordinary shares are
  recognised as a deduction from equity, net of any tax effect.
  Repurchase
  and reissue of ordinary shares (treasury shares)
  When
  shares recognised as equity are repurchased, the amount of the consideration
  paid, which includes directly attributable costs is recognised as a deduction
  from equity. Repurchased shares are classified as treasury shares and are
  presented as a deduction from share capital.
  Dividends
  Dividends
  are recognised as a liability on the date on which they are declared which is
  the date when the shareholders’ right to the dividends vest.
  Amounts in R million
 2018
 2017
 2016Authorised share capital1 500 000 000 (2017 and 2016: 600 000 000) ordinary shares of no
  par value5 000 000 (2017 and 2016: 5 000 000) cumulative preference
  shares of 10 cents each
 0.5
 0.5
 0.5Issued share capital431 429 767 (2017 and 2016: 431 429 767) ordinary shares of no
  par value (a,b)
 4 227.9
 4 227.9
 4 227.99 361 071 (2017 and 2016: 9 361 071) treasury shares held within
  the Group (c)
 (50.7)
 (50.7)
 (50.7)5 000 000 (2017 and 2016: 5 000 000) cumulative preference
  shares of 10 cents each
 0.5
 0.5
 0.54 177.7
 4 177.7
 4 177.7Dividends (c)Dividends paid during the year net of treasury shares:Prior year final dividend: 5 SA cents per share (2017: 12 SA
  cents per share; 2016: 10 SA cents per share)
 21.1
 50.6
 42.2Interim dividends: 5 SA cents per share (2017: nil; 2016: 50 SA
  cents per share)
 21.1
 -
 210.7Total
 42.2
 50.6
 252.9
 (a)  Unissued
shares In terms of an ordinary resolution passed at the
previous annual general meeting, the remaining unissued ordinary shares in the
company are under the control of the directors until the next general meeting.  (b)  Issued shares No shares
were issued during the year ended June 30, 2018 (2017: nil) During the
year ended June 30, 2016: 546,000 shares were issued
relating to share options exercised under the DRDGOLD (1996) share scheme). On July 31, 2018, the acquisition of FWGR became
unconditional. On this date 265 million ordinary shares
were issued to Sibanye-Stillwater as settlement of the purchase consideration
for these assets.  (c)  Treasury shares Shares in DRDGOLD Limited are held in treasury by Ergo
Mining Operations Proprietary Limited ("EMO"). No shares were
acquired in the market during the year ended June 30, 2018 (2017: nil; 2016: 3 205 512). Dividends amounting to R0.9 million (2017: R1.1 million; 2016: R5.6
million) were received on these shares.  RELATED PARTY
RELATIONSHIPS: The issue of 265 million ordinary shares to Sibanye-Stillwater on
July 31, 2018 as settlement of the purchase consideration for the FWGR assets,
resulted in Sibanye-Stillwater owning 38.05% of the issued ordinary shares of
DRDGOLD Limited and hence becoming a related party to DRDGOLD. 10732


---

21
 OPERATING SEGMENTSACCOUNTING
  POLICIES
  Operating
  segments are reported in a manner consistent with internal reports that the
  Group’s chief operating decision maker (CODM) reviews regularly in allocating
  resources and assessing performance of operating segments. The CODM has been
  identified as the Group’s Executive Committee. The Group has one revenue
  stream, the sale of gold. To identify operating segments, management reviewed
  various factors, including operational structure and mining infrastructure.
  It was determined that an operating segment consists of a single or multiple
  metallurgical plants that, together with its deposition facility, is capable
  of operating independently.
  When
  assessing profitability, the CODM considers, inter alia, the revenue
  and production costs of each segment. The net of these amounts is the
  operating profit or loss. Therefore, operating profit has been disclosed in
  the segment report as the primary measure of profit or loss. The CODM also
  considered other costs that, in addition to the operating profit or loss,
  result in the working profit or loss.
 Ergois a surface retreatment operation and treats old slime and sand
dumps to the south of Johannesburg’s central business district as well as the
East and Central Rand goldfields. The operation comprises three plants. The
Ergo and Knights plants continue to operate as metallurgical plants. The City
Deep plant continues to operate as a pump/milling station feeding the metallurgical
plants. The Crown plant operated as a pump/milling station feeding the
metallurgical plants until March 2017 when it ceased all operations. Corporate office and other reconciling items(collectively referred to as"Other reconciling
items") are taken into consideration in the strategic decision-making
process of the CODM and are therefore included in the disclosure here, even
though they do not earn revenue. They do not represent a separatesegment.  Other2018
 
 reconcilingAmounts in R million
 Ergo
 items
 TotalFinancial performanceRevenue (External)
 2 490.4
 -
 2 490.4Cash operating costs
 (2 159.7)
 -
 (2 159.7)Movement in gold in process
 24.5
 -
 24.5Operating profit
 355.2
 -
 355.2Administration expenses and general costs(1)
 (11.5)
 (78.6)
 (90.1)Interest income(2)
 9.5
 12.3
 21.8Interest expense (3)
 (3.1)
 (1.0)
 (4.1)Current tax
 (2.9)
 (3.5)
 (6.4)Working profit/(loss) before capital expenditure
 347.2
 (70.8)
 276.4Additions to property, plant and equipment
 (125.2)
 (0.9)
 (126.1)Working profit/(loss) after capital expenditure
 222.0
 (71.7)
 150.3(1) Administration expenses and general costs
  excludes loss on disposal of property, plant and equipment(2) Interest income excludes the unwinding of
  the long-term receivable(3) Interest expense excludes the fair value
  adjustment on the initial recognition of the long-term receivableReconciliation of profit/(loss) for the yearWorking profit/(loss) before capital expenditure
 347.2
 (70.8)
 276.4- Depreciation
 (167.4)
 (0.6)
 (168.0)- Movement in provision for environmental rehabilitation
 2.5
 0.4
 2.9- Growth in investment in environmental obligation funds
 10.1
 6.2
 16.3- Loss on disposal of property, plant and equipment
 (0.6)
 -
 (0.6)- Unwinding of provision for environmental rehabilitation
 (44.3)
 (1.3)
 (45.6)- Fair value adjustment on the initial recognition of long-termreceivable including subsequent unwinding
 (8.1)
 -
 (8.1)- Ongoing rehabilitation expenditure
 (26.7)
 -
 (26.7)- Net other operating (costs)/income
 (36.2)
 15.6
 (20.6)- Deferred tax
 (23.2)
 3.7
 (19.5)Profit/(loss) for the year
 53.3
 (46.8)
 6.5Statement of cash flowsCash flows from operating activities
 285.3
 (51.5)
 233.8Cash flows from investing activities
 (140.2)
 (0.2)
 (140.4)Cash flows from financing activities
 (2.8)
 (42.2)
 (45.0)
 10832


---

21
 OPERATING SEGMENTScontinuedOther2017
 
 reconcilingAmounts in R million
 Ergo
 items
 TotalFinancial performanceRevenue (External)
 2 339.9
 -
 2 339.9Cash operating costs
 (2 087.9)
 -
 (2 087.9)Movement in gold in process
 4.8
 -
 4.8Operating profit
 256.8
 -
 256.8Interest income
 6.8
 16.8
 23.6Interest expense
 (3.3)
 (2.4)
 (5.7)Retrenchment costs
 (23.0)
 -
 (23.0)Administration expenses and general costs
 (4.5)
 (64.9)
 (69.4)Current tax
 (1.9)
 -
 (1.9)Working profit/(loss) before capital expenditure
 230.9
 (50.5)
 180.4Additions to property, plant and equipment
 (116.2)
 (0.1)
 (116.3)Additions to unlisted investments
 -
 (0.1)
 (0.1)Working profit/(loss) after capital expenditure
 114.7
 (50.7)
 64.0Reconciliation of profit/(loss) for the yearWorking profit/(loss) before capital expenditure
 230.9
 (50.5)
 180.4- Depreciation
 (179.7)
 (0.1)
 (179.8)- Movement in provision for environmental rehabilitation
 (0.6)
 -
 (0.6)- Growth in environmental rehabilitation trust funds and
  reimbursive right
 10.9
 5.5
 16.4- Profit on disposal of property, plant and equipment
 0.2
 12.7
 12.9- Unwinding of provision for environmental rehabilitation
 (45.3)
 (1.2)
 (46.5)- Ongoing rehabilitation expenditure
 (22.4)
 -
 (22.4)- Net other operating (costs)/income
 (30.3)
 31.3
 1.0- Deferred tax
 54.2
 (1.9)
 52.3Profit/(loss) for the year
 17.9
 (4.2)
 13.7Statement of cash flowsCash flows from operating activities
 32.5
 19.1
 51.6Cash flows from investing activities
 (116.6)
 19.9
 (96.7)Cash flows from financing activities
 (2.4)
 (50.6)
 (53.0)
 10932


---

21
 OPERATING SEGMENTScontinuedOther2016
 
 reconcilingAmounts in R million
 Ergo
 items
 TotalFinancial performanceRevenue (External)
 2 433.1
 -
 2 433.1Cash operating costs
 (1 991.2)
 -
 (1 991.2)Movement in gold in process
 (7.1)
 -
 (7.1)Operating profit
 434.8
 -
 434.8Interest income
 2.8
 19.6
 22.4Interest expense
 (4.1)
 (0.5)
 (4.6)Administration expenses and general costs
 (4.5)
 (82.7)
 (87.2)Current tax
 (0.5)
 (5.1)
 (5.6)-
 -
 -Working profit/(loss) before capital expenditure
 428.5
 (68.7)
 359.8Additions to property, plant and equipment
 (100.0)
 -
 (100.0)Additions to listed investments
 -
 (1.3)
 (1.3)-
 -
 -Working profit/(loss) after capital expenditure
 328.5
 (70.0)
 258.5Reconciliation of profit/(loss) for the yearWorking profit/(loss) before capital expenditure
 428.5
 (68.7)
 359.8- Depreciation
 (180.1)
 (0.1)
 (180.2)- Movement in provision for environmental rehabilitation
 (21.4)
 2.1
 (19.3)- Growth in environmental rehabilitation trust funds and
  reimbursive right
 9.8
 4.7
 14.5- Profit on disposal of property, plant and equipment
 9.3
 1.2
 10.5- Unwinding of provision for environmental rehabilitation
 (41.5)
 (1.5)
 (43.0)- Ongoing rehabilitation expenditure
 (27.8)
 -
 (27.8)- Net other operating (costs)/income
 (29.6)
 18.3
 (11.3)- Deferred tax
 (46.9)
 5.6
 (41.3)Profit/(loss) for the year
 100.3
 (38.4)
 61.9Statement of cash flowsCash flows from operating activities
 414.8
 1.1
 415.9Cash flows from investing activities
 (105.6)
 (1.6)
 (107.2)Cash flows from financing activities
 (2.0)
 (279.1)
 (281.1)
 22
 INTEREST IN
  SUBSIDIARIESACCOUNTING
  POLICIES
  Significant
  subsidiaries of the Group are those subsidiaries with the most significant
  contribution to the Group's profit or loss or assets.
 Ergo Mining
Proprietary Limited is the only significant subsidiary of the Group. It is
primarily involved in the retreatment of surface gold and all of its operations
are based in South Africa. Ergo Mining Proprietary Limited is a wholly owned
subsidiary and is incorporated in South Africa.  11032


---

23
 ASSETS AND
  LIABILITIES CLASSIFIED AS HELD FOR SALESIGNIFICANT
  ACCOUNTING JUDGEMENTS
  The
  assessment of whether the disposal is highly probable requires the exercise
  of significant judgement and estimates of the outcome of future events that
  are not wholly within the control of the Group.
  
  ACCOUNTING
  POLICIES
  Non-current
  assets or disposal groups, comprising non-current assets and liabilities, are
  classified as held for sale if it is highly probable that they will be
  recovered primarily through sale rather than continuing use. Such assets or
  disposal groups are measured at the lower of their carrying amount and fair
  value less cost to sell. Impairment losses on initial application as held for
  sale and subsequent gains and losses on re-measurement are recognised in
  profit or loss.
  Non-current
  assets and disposal groups cease to be classified as held for sale if it is
  not highly probable that they will be recovered primarily through sale rather
  than continuing use.
  Such
  assets that cease to be classified as held for sale are measured at the lower
  of their carrying amount before such assets were classified as held for sale,
  adjusted for any depreciation that would have been recognised had such assets
  not been classified as held for sale, and their recoverable amount at the
  date of the subsequent decision not to sell.
  Amounts in R million
 Note
 2018
 2017Assets held for saleProperty, plant and equipment *
 
 -
 -Opening balance
 
 -
 5.8Transferred to property, plant and equipment
 9
 -
 (0.8)Disposal
 
 -
 (5.0)Non-current investments and other assets
 
 -
 -Opening balance
 
 -
 9.2Growth
 6
 -
 0.7Transferred to cash and cash equivalents in environmental
  rehabilitation trust funds
 11
 -
 (9.9)-
 -* Consists of land that is carried at cost and is not
  depreciated.Liabilities held for saleProvisions
 
 -
 -Opening balance
 
 -
 15.6Unwinding of provision
 7
 -
 1.2Transferred to provision for environmental rehabilitation
 10
 -
 (16.8)-
 -
 In line with the
Group’s strategy to exit underground mining operations, management committed to
a plan to sell certain of the underground mining and prospecting rights held by
East Rand Proprietary Mines Limited ("ERPM") including the related liabilities
late during the financial year ended June 30, 2014. Since that date up to 31
December 2016, these assets and liabilities had been presented as a disposal
Group held for sale due to being “highly probable” as defined. At June 30, 2017,
management concluded that the disposal of these underground mining and
prospecting rights, including the related liabilities, was no longer “highly
probable” and reclassified these assets and liabilities based on their
underlying nature. The last
outstanding regulatory approval, being the approval under Section 11 of the
Mineral and Petroleum Resource Development Act was not fulfilled by the
purchaser. Management decided not to provide any further extension to the
purchaser and accordingly the agreement in respect of the disposal of these
underground mining and prospecting rights, including the related liabilities,
lapsed.  11132


---

24
 FINANCIAL ASSETSSIGNIFICANT
  ACCOUNTING JUDGEMENTS
  The
  assessment to define the accounting policy and subsequent classification of
  the long-term receivable requires the exercise of significant judgement of
  the outcome of future events that are not wholly under the control of the
  Group.
  The
  judicial proceedings that impacts on the long-term receivable are inherently
  complex legal issues that are subject to uncertainties and complexities and
  are subject to interpretation.
  SIGNIFICANT
  ACCOUNTING ASSUMPTIONS AND ESTIMATES
  The
  fair value determination of the long-term receivable is determined using
  assumptions and estimates that are inherently uncertain and can change
  materially over time.
  These
  assumptions and estimates include estimating the timing of concluding on the
  main application, the ultimate settlement terms, the discount rate applied
  and the credit risk assessment for impairment purposes.
  ACCOUNTING
  POLICIES
  Investment
  in other entities
  The
  Group’s listed and unlisted investments in equity securities are classified
  as available-for-sale financial assets. These assets are initially recognised
  at fair value plus any directly attributable transaction costs. Subsequent to
  initial recognition they are measured at fair value and changes therein,
  other than impairment losses, are recognised in OCI.
  Long-term
  receivable
  The
  long-term receivable is a non-derivative financial asset categorised as loans
  and receivables.
  The
  asset is initially measured at fair value and any difference between the face
  value of payments made and the fair value of the long-term receivable on
  initial recognition are recognised in profit or loss as a finance expense.
  Subsequent
  to initial recognition, the long-term receivable is measured at amortised
  cost using the effective interest method less any impairment losses. Unwinding
  of the carrying value is accounted for as a finance income.
  Impairment
  A
  financial asset not classified at fair value through profit or loss is
  assessed at each reporting date to determine whether there is any objective
  evidence (e.g. delinquency of a debtor and indications that a debtor will
  enter bankruptcy) that it is impaired. A financial asset is considered to be
  impaired if objective evidence indicates that one or more events have had a
  negative effect on the estimated future cash flows of that asset.
  Any
  impairment losses are recognised in the statement of profit or loss.
  Amounts in R million
 
 
 
 Note
 2018
 2017Investments in other entities
 
 
 
 24.1
 9.4
 8.8Long-term receivable
 
 
 
 24.2
 19.3
 -Total financial assets
 
 
 
 
 28.7
 8.8
 24.1
 INVESTMENTS IN OTHER ENTITIESAmounts in R million
 Shares
  held
 % held
 2018
 2017Listed investments (Fair value hierarchy
  Level 1):
 
 
 9.2
 8.6West Wits Mining Limited ("WWM")
 47 812 500
 6.7%
 9.2
 8.6Unlisted investments (Fair value hierarchy
  Level 3):
 
 
 0.2
 0.2Rand Refinery Proprietary Limited ("Rand Refinery")
  (a)
 44 438
 11.0%
 -
 -Guardrisk Insurance Company Limited (Cell Captive A170) ^
 20
 #
 0.1
 0.1Chamber of Mines Building Company Proprietary Limited
 30 160
 3.0%
 0.1
 0.1Rand Mutual Assurance Company Limited
 1
 #
 -
 -9.4
 8.8Fair value adjustment on available for sale financial assets
  recognised in OCI
 
 
 0.6
 (0.3)#Represents a less than 1% shareholding.^ Class A
  170 shares are held in Guardrisk Insurance Company Limited that entitles the
  holder to 100% of the residual net equity of the Cell Captive A 170 after
  settlement of the reimbursive right.
 11232


---

24   FINANCIAL ASSETScontinued 24.1    INVESTMENT
IN OTHER ENTITIEScontinued (a)     Rand Refinery The estimated fair
value of the investment in Rand Refinery shares remainsde minimisdue
to the uncertainty regarding Rand Refinery's future free cash flows and the
lack of marketability of the shares held. MARKET RISK Other market
price risk Equity price risk
arises from changes in quoted market prices of listed investments as well as
changes in the fair value of unlisted investments due to changes in the
underlying net asset values. FAIR VALUE
OF FINANCIAL INSTRUMENTS Listed
investments The fair value of
listed investments are determined by reference to published price quotations
from recognised securities exchanges and constitute level 1 instruments on the
fair value hierarchy. Unlisted
investments The valuations are
based on either the net asset values of these companies, or the consideration
of unobservable financial information which is compared to information
available in the market regarding other market participants' view on the value
of the company and constitute level 3 instruments on the fair value hierarchy. 24.2
 LONG-TERM RECEIVABLE
 Payments
were made under protest to the Municipality (refer note 25) amounting to R 27.4
million(excluding VAT), consisting of an initial payment
of R22.5 million as well as subsequent payments of R4.9 million comprising the
difference between the J-tariff and the Eskom tariff. The initial payment was
made from cash held in escrow relating to the electricity tariff dispute with
Ekurhuleni Metropolitan Municipality (refer note 12). The
long-term receivable resulting from these payments was initially recognised at
fair value of R18.6 million, resulting in a fair value adjustment at initial
recognition of R8.8 million, accounted for as finance expense (refer note 7). The
long-term receivable constitutes a level 3 instrument on the fair value
hierarchy. The fair value was determined using the income approach present
value technique. The calculation was based on the following assumptions: ·discount rate: 11.68% representing the Municipality maximum cost
of borrowing on bank loans as disclosed in their June 30, 2017 annual report;
and ·discount period: 3 years representing management’s best estimate
of the date of conclusion of the Main Application. During
the year, an unwinding of R0.7 million was recognised, accounted for as finance
income (refer note6). CREDIT
RISK The
Group is exposed to credit risk on the total carrying value of the long-term
receivable. The credit risk was considered in the determination of the fair
value at initial recognition by discounting the payments made over the
estimated period until the conclusion of the Main Application using the
Municipality’s incremental cost of borrowing. The
Group manages the credit risk by regularly monitoring the events surrounding
the outcome of the Main Application and assessing the long-term receivable for
recoverability. FAIR
VALUE OF FINANCIAL INSTRUMENTS The
carrying value of the payments made resulting in the other long-term receivable
is adjusted to its fair value on an ongoing basis by initially discounting and
subsequently unwinding over the estimated period until the expected conclusion
of the Main Application using the Municipality’s incremental cost of borrowing.  11332


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25
 CONTINGENT ASSETS
  AND LIABILITIESSIGNIFICANT
  ACCOUNTING JUDGEMENTS
  The
  assessment of whether an obligating event results in a liability or a
  contingent liability require the exercise of significant judgement of the
  outcome of future events that are not wholly within the control of the Group.
  Litigation
  and other judicial proceedings inherently entail complex legal issues that
  are subject to uncertainties and complexities and are subject to
  interpretation.
  ACCOUNTING
  POLICIES
  A
  contingent liability is a possible obligation arising from past events and
  whose existence will be confirmed only by occurrence or non-occurrence of one
  or more uncertain future events not wholly within the control of the Group. A
  contingent liability may also be a present obligation arising from past
  events but is not recognised on the basis that an outflow of economic resources
  to settle the obligation is not viewed as probable, or the amount of the
  obligation cannot be reliably measured. When the Group has a present
  obligation, an outflow of economic resources is assessed as probable and the
  Group can reliably measure the obligation, a provision is recognised.
  Environmental Mine
residue deposits may have a potential pollution impact on ground water through
seepage. The Group has taken certain preventative actions as well as remedial
actions in an attempt to minimise the Group’s exposure and environmental
contamination. The
flooding of the western and central basins have the potential to cause
pollution due to Acid Mine Drainage (“AMD”) contaminating the ground water. The
government has appointed Trans-Caledon Tunnel Authority (“TCTA”) to construct a
partial treatment plant to prevent the ground water being contaminated. TCTA
completed the construction of the neutralisation plant for the Central Basin
and commenced treatment during July 2014. As part of the heads of agreement
signed in December 2012 between EMO, Ergo, ERPM and TCTA, sludge emanating from
this plant since August 2014 has been co-disposed onto the Brakpan Tailings
Storage facility. Partially treated water has been discharged by TCTA into the
Elsburg Spruit. This
agreement includes the granting of access to the underground water basin
through one of ERPM’s shafts and the rental of a site onto which it constructed
its neutralisation plant. In exchange, Ergo and its associate companies
including ERPM have a set-off against any future directives to make any
contribution toward costs or capital of up to R250 million. Through this
agreement, Ergo also secured the right to purchase up to 30 Ml of partially
treated AMD from TCTA at cost, in order to reduce Ergo’s reliance on potable
water for mining and processing purposes. While
the heads of agreement should not be seen as an unqualified endorsement of the
state’s AMD solution, and do not affect our right to either challenge future
directives or to implement our own initiatives should it become necessary, it
is an encouraging development. DRDGOLD,
through its participation in the Western Utilities Corporation initiative,
provided the government with a solution for a sustainable long-term solution to
AMD. This solution would have been at no cost to the mines and government. In
view of the limitation of current information for the accurate estimation of a
potential liability, no reliable estimate can be made for the possible
obligation.  11432


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25   CONTINGENTASSETS
ANDLIABILITIEScontinued Ekurhuleni Metropolitan Municipality ("Municipality")
Electricity Tariff Dispute The Main Application  Integral
to Ergo’s gold extraction operation is its metallurgical plant at Brakpan
(“Ergo Plant”) located within the municipal boundaries of the Municipality.  In
order to operate the Ergo Plant and conduct its business operations, Ergo
requires a reliable and steady feed of electricity which it draws from Eskom’s Ergo
Central Substation.  Over
the past several years the Municipality has charged Ergo for such electricity,
at the Megaflex tariff, which is the rate at which Eskom charges its large
power users plus an additional surcharge.  Pursuant
to its own investigations, and after having sought legal advice on the matter,
Ergo determined that not only is it supplied by Eskom, not the Municipality,
but also that the surcharges levied were inconsistent with the provisions of
the Local Government: Municipal Systems Act (“Systems Act”), which sets down
clear and strict parameters in this regard. Ergo subsequently challenged the
Municipality, Eskom and the National Energy Regulator of South Africa (“NERSA”)
for declaratory relief. Included in the application are the Minister of Energy
Affairs, the Minister of Co-operative Governance & Traditional Affairs and
the South African Local Government Association, the latter 4 (four) respondents
against whom Ergo does not seek any relief and who have not opposed the
application.  Ergo
seeks the following relief: 1.    declaring that it is not supplied electricity by the
Municipality and that the Municipality is not authorised to levy a surcharge of
40% (“the D-tariff”) to the rate which Eskom ordinarily charges Ergo on its
Megaflex rate (“Eskom tariff”);  2.    declaring that the Municipality is in breach of its
temporary Distribution Licence (issued by NERSA) by purporting to supply
electricity to Ergo at the Ergo Plant;  3.    declaring that neither the Municipality nor Eskom may
lawfully insist that only the Municipality may supply electricity to Ergo at
the Ergo Plant;  4.    declaring
that Eskom presently supplies electricity to Ergo at the Ergo Plant; and  5.    directing Eskom to conclude a consumer agreement with Ergo
for the supply of electricity at the Ergo Plant at Eskom’s Megaflex tariff.  Ergo
also instituted a counterclaim against the Municipality for the recovery of the
surcharges which were erroneously paid to the Municipality in thebona fidebelief that they were due and payable prior to the Main Application of
approximately R43 million (these surcharges were expensed for accounting
purposes).  Consequently,
and pending the final determination of the Main Application by the High Court,
Ergo stopped paying the surcharges to the Municipality, paying and expensing
only the Eskom tariff and depositing the difference comprising the D-tariff
into its attorneys’ trust account as security in favour of the Municipality in
the event that the court rules against Ergo. These surcharges were not expensed
but recognised under cash and cash equivalents as restricted cash (refer note
12).    11532


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25   CONTINGENTASSETS ANDLIABILITIEScontinued Ekurhuleni Metropolitan Municipality ("Municipality")
Electricity Tariff Disputecontinued  The
Urgent Application  In
May 2015 the Municipality threatened to, through an interruption to the Eskom
supply grid, cause the supply of electricity to the Ergo Central Substation to
be terminated.  Ergo successfully interdicted the Municipality, pending the
determination of the Main Application.  The
Municipality sought leave to appeal the interdict, which application was
rejected by the High Court. The Municipality then successfully petitioned the
Supreme Court of Appeal (“SCA”) in Bloemfontein for leave to appeal thereto.  Ergo
subsequently, and ultimately, petitioned the Constitutional Court in
Braamfontein, Johannesburg in December 2017 for leave to appeal thereto against
the latter judgment of the full bench of the SCA which found in favour of the
Municipality. In January 2018, the Constitutional Court rejected and refused to
hear Ergo’s petition for a further appeal.  This
ruling enabled the Municipality to avail itself of the credit control measures
provided for in the Systems Act by terminating the supply of electricity to
Ergo, unless it paid the surcharges levied in their entirety and which were
retained in Ergo’s attorneys’ trust account over to the Municipality.  On
the date of the Constitutional Court ruling, the money held in Ergo’s
attorney’s trust account amounted to approximately R126 million. In February
2018, Ergo paid R25.2 million (including VAT) from the trust account to the
Municipality, under protest and without prejudice and/or admission of liability
(refer note 24.2). This amount was the difference between the surcharge of 11%
(“the J-tariff”) over the Eskom tariff which was introduced during the course
of 2017“for bulk supplies at medium and high voltage situated in a position
designated by the Municipality as close-coupled to the Eskom grid”. The
J-tariff, which Ergo still deems to be irregular and disproportionate in
accordance with the provisions of the Systems Act, is significantly lower than
the previously imposed “D-tariff”. The balance, following the payments of the
R25.2 million, remains in the trust account of Ergo’s attorneys of record.
Subsequently, Ergo pays monthly to the Municipality, the amount calculated at
the lower J-tariff in respect of its electricity consumption, under protest and
without prejudice and/or admission of liability (refer note 24.2).  Ergo’s
legal team is confident about the prospects of success in the Main Application on
the basis that the Municipality does not supply electricity to Ergo or in any
manner add value to Eskom’s supply of electricity to Ergo. Ergo is furthermore,
in terms of the Main Application, in addition to its contention that the
Municipality does not supply electricity to it and not licensed to supply it,
challenging the imposition of both the J-tariff and D-tariff on the grounds
that they are,inter alia,ultra viresand beyond the scope of
the Municipality’s Electricity By-Laws, the Systems Acts as well as the Credit
Control and Debt Collection By-Laws.  The
Main Application has been set down for hearing on December 5, 2018. Based on management’s
assessment of the probability of outflows, no liability for any surcharges
claimed by the Municipality has been recognised.   11632


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25   CONTINGENTASSETS ANDLIABILITIEScontinued Occupational Lung
Diseases In January
2013, DRDGOLD, ERPM (“DRDGOLD Respondents”) and 23 other mining companies
(“Other Respondents”) (collectively referred to as "Respondents") were
served with a court application issued in the High Court of South Africa
(“Court") for a class certification (“Certification Application”) on
behalf of former mineworkers and dependents of deceased mineworkers
(“Applicants”). In the application the Applicants allege that the Respondents
conducted underground mining operations in a negligent and complicit manner
causing the former mineworkers to contract occupational lung diseases. The
Applicants have as yet not quantified the amounts which they are demanding from
the Respondents in damages. On
May 13, 2016, the Court granted an order for,inter alia,(1)
certification of two industry-wide classes: a silicosis class and a
tuberculosis class, both of which cover current and former underground
mineworkers who have contracted the respective diseases (or the dependants of
mineworkers who died of those diseases); and (2) that the common law be
developed to provide that in instances where a claimant claiming general
damages passed away, the claim for general damages will be transmitted to the
estate of the deceased claimant. This order did not represent a ruling on the
merits of the Application brought against the Respondents. An
application for leave to appeal to the Supreme Court of Appeal (“SCA”) was
brought by each of the respondent mining companies against the judgment of the
Court, specifically on the allegations of the certification and
transmissibility of damages to the estate of a deceased mineworker. In
June 2016, the Court granted leave to appeal to the SCA against the
transmissibility of damages but refused leave to appeal in respect of the
certification. The
DRDGOLD Respondents (together with each of the Working Group companies) served
a notice of appeal to petition the SCA against the order for certification and
the transmissibility of damages. The SCA granted leave to appeal thereto on
both issues in September 2016. The
appeal to the SCA was set down for hearing in March 2018 but was subsequently
postponed by agreement between the Applicants and the Respondent companies in
light of the progress made by the Working Group as described below. The SCA
endorsed and upheld the postponement. The
Respondent companies formed a Working Group consisting of representatives from
each company to consider and discuss issues pertaining to the action. DRDGOLD
withdrew from the Working Group in January 2016. The
remaining members of the Working Group have all raised accounting provisions during
the calendar year 2017 due to progress made by the Working Group towards a
possible settlement with the Applicants. In May 2018, the remaining members of
the Working Group announced that a mediated settlement agreement had been
reached. The agreement is subject to certain conditions, including the approval
by the South African High Court after which an effective date of the agreement
will be set.  DRDGOLD
is not a party to the Working Group’s mediated settlement agreement and
maintains the view that it is too early to consider settlement of the matter,
mainly for the following reasons: •      the
Applicants have as yet not issued and served a summons (claim) in the matter; •      there is no indication of the number of potential
claimants that may join the class action against the DRDGOLD respondents; •      many
principles upon which legal responsibility may be founded, are required to be
substantially developed by the trial court (and possibly subsequent courts of
appeal) to establish liability on the bases alleged by the applicants. In
light of the above there is inadequate information to determine if a sufficient
legal and factual basis exists to establish liability, and to quantify such
potential liability.  11732


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26   FINANCIAL INSTRUMENTS Overview The Group has exposure to
credit risk, liquidity risks, as well as other market risks from its use of
financial instruments. This note presents information about the Group’s
exposure to each of the above risks, the Group’s objectives and policies and
processes for measuring and managing risk. The Group’s management of capital is
disclosed in note 19. This note must be read with the quantitative disclosures
included throughout these consolidated financial statements. Financial risk
management framework The board of directors
(“Board”) has overall responsibility for the establishment and oversight of the
Group’s risk management framework. The Board has established the Audit and Risk
Committee, which is responsible for developing and monitoring the Group’s risk
management policies. The committee reports regularly to the Board on its
activities. The Group’s risk management
policies are established to identify and analyse the risks faced by the Group,
to set appropriate risk limits and controls, and to monitor risks and adherence
to limits. Risk management policies and systems are reviewed regularly to
reflect changes to market conditions and the Group’s activities. The Group,
through its training and management standards and procedures, aims to develop a
disciplined and constructive control environment in which all employees
understand their roles and obligations. The Audit and Risk Committee
oversees how management monitors compliance with the Group’s risk management
policies and procedures, and reviews the adequacy of the risk management
framework in relation to the risks faced by the Group. The Audit and Risk
Committee is assisted in its oversight role by the internal audit function. The
internal audit function undertakes both regular and ad hoc reviews of risk
management controls and procedures, the results of which are reported to the
Audit and Risk Committee. CREDIT RISK Credit risk is the risk of
financial loss to the Group if a customer or counterparty to a financial
instrument fails to meet its contractual obligations, and arises principally
from the Group’s receivables and investment securities. The Group’s financial
instruments do not represent a concentration of credit risk due to the exposure
to credit risk being managed as disclosed in the following notes: NOTE 11      INVESTMENTS IN
REHABILITATION OBLIGATION FUNDS NOTE 12      CASH AND CASH
EQUIVALENTS NOTE 14      TRADE AND
OTHER RECEIVABLES NOTE 24      FINANCIAL
ASSETS  11832


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26   FINANCIAL INSTRUMENTScontinued MARKET RISK Market risk is the risk that
changes in market prices, such as commodity prices, foreign exchange rates,
interest rates and equity prices will affect the consolidated profit or loss or
the value of its financial instruments. The objective of market risk management
is to manage and control market risk exposures within acceptable parameters,
while optimising returns. Commodity price risk Additional disclosures are
included in the following note: NOTE 4        REVENUE Other market risk Additional disclosures are
included in the following note: NOTE 24.1   INVESTMENTS IN
OTHER ENTITIES Interest rate risk Fluctuations in interest
rates impact on the value of short-term cash investments and financing
activities, giving rise to interest rate risk. In the ordinary course of
business, the Group receives cash from its operations and is obliged to fund
working capital and capital expenditure requirements. This cash is managed to
ensure surplus funds are invested in a manner to achieve maximum returns while
minimising risks. Lower interest rates result in lower returns on investments
and deposits and also may have the effect of making it less expensive to borrow
funds at then current rates. Conversely, higher interest rates result in higher
interest payments on loans and overdrafts. Additional disclosures are
included in the following notes: NOTE 11      INVESTMENTS IN
REHABILITATION OBLIGATION FUNDS NOTE 12      CASH AND CASH
EQUIVALENTS Foreign currency risk The Group enters into
transactions denominated in foreign currencies, such as gold sales denominated
in US dollar, in the ordinary course of business. This exposes the Group to
fluctuations in foreign currency exchange rates. Additional disclosures are
included in the following notes: NOTE 12      CASH AND CASH
EQUIVALENTS NOTE 14      TRADE AND
OTHER RECEIVABLES  LIQUIDITY RISK Liquidity risk is the risk
that the Group will not be able to meet its financial obligations as they fall
due. The Group’s approach to managing liquidity is to ensure, as far as
possible, that it will always have sufficient liquidity to meet its liabilities
when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Group’s reputation. The Group ensures that it has
sufficient cash on demand to meet expected operational expenses, including the
servicing of financial obligations; this excludes the potential impact of
extreme circumstances that cannot reasonably be predicted, such as natural
disasters. Additional disclosures are
included in the following note: NOTE 15      TRADE AND
OTHER PAYABLES NOTE 19      CAPITAL
MANAGEMENT   11932


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27   RELATED PARTIES Disclosures are included in the
following notes: NOTE 18.2   TRANSACTIONS WITH KEY
MANAGEMENT PERSONNEL NOTE
20      EQUITY NOTE 22      INTEREST IN
SUBSIDIARIES  28   SUBSEQUENT
EVENTS There were
no significant subsequent events between the year-end reporting date of June 30,
2018 and the date of issue of these financial statements other than described
below and included in the preceding notes to the consolidated financial
statements. Acquisition of FWGR On November
22, 2017, DRDGOLD Limited signed an agreement for the acquisition of the gold
assets associated with Sibanye-Stillwater’s West Rand Tailings Retreatment
Project (“WRTRP”), to be known going forward as Far West Gold Recoveries
Proprietary Limited (“FWGR”). On July 31, 2018
the transaction became effective on the waiver of the last outstanding
condition, being the granting of the Section 102 Applications to
Sibanye-Stillwater. As purchase
consideration for the acquisition of these assets, DRDGOLD Limited issued 265
million new ordinary shares equal to 38.05% of DRDGOLD Limited’s outstanding
shares to Sibanye-Stillwater and granted Sibanye-Stillwater an option to
subscribe for new ordinary shares up to a total of 50.1% of the total issued
ordinary shares of DRDGOLD Limited at a 10% discount to the prevailing market
value, to be exercised within a period of 2 years from the effective date of the
acquisition. Additional
disclosures are included in the following notes: NOTE
4        REVENUE NOTE
19      CAPITAL MANAGEMENT NOTE
20      EQUITY   12032


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ITEM 19. EXHIBITS  The following exhibits are filed as a part of
this Annual Report: 1.1(1)
 Memorandum of Association of DRDGOLD
  Limited.1.2(6)
 Articles of Association of DRDGOLD Limited,
  as amended on November 8, 2002.
  http://www.sec.gov/Archives/edgar/data/1023512/000104746902008746/a2096282zex-1_2.txt1.3(1)
 Excerpts of relevant provisions of the
  South African Companies Act.1.5(9)
 Memorandum of Incorporation, as amended on
  November 30, 2012.
  http://www.sec.gov/Archives/edgar/data/1023512/000120561313000188/ex1_5.htm2.1(1)
 Excerpts of relevant provisions of the
  Johannesburg Stock Exchange Listings Requirements.2.2(4)
 Indenture between DRDGOLD Limited, as
  Issuer, and The Bank of New York Mellon, as Trustee, dated November 12, 2002.
  http://www.sec.gov/Archives/edgar/data/1023512/000104746902008746/a2096282zex-2_2.txt4.1(2)
 Deposit Agreement among DRDGOLD Limited,
  The Bank of New York Mellon as Depositary, and owners and holders of American
  Depositary Receipts, dated as of August 12, 1996, as amended and restated as
  of October 2, 1996, as further amended and restated as of August 6, 1998, as
  further amended and restated July 23, 2007.4.2(3)
 Form of Non‐Executive Employment
  Agreement.4.3(3)
 Form of Executive Employment Agreement.4.4(4)
 Agreement between DRDGOLD Limited and Rand
  Refinery Limited, dated October 12, 2001.
  http://www.sec.gov/Archives/edgar/data/1023512/000104746902008746/a2096282zex-4_36.txt4.5(12)
 Local Mine Bullion Refining Agreement between DRDGOLD Limited and Rand
  Refinery Limited, dated June 27, 2018.4.6(5)
 Option Agreement entered into by and between DRDGOLD
  Limited and M5 Developments Proprietary Limited, dated July 21, 2005.
  http://www.sec.gov/Archives/edgar/data/1023512/000120561305000206/ex4_91.htm4.7(7)
 Domestic Medium Term Note Programme (“Programme”) entered into
  by DRDGOLD South African Operations Proprietary Limited (“Issuer”) and
  DRDGOLD Limited (“guarantor’) dated September 30 2010.
  http://www.sec.gov/Archives/edgar/data/1023512/000120561310000164/ex4_138.htm4.8(8)
 Domestic Medium Term Note ) and High Yield Programme (“DMTN
  Programme”)  Agreement entered into by DRDGOLD  Limited (“Issuer”)  Crown
  Gold Recoveries Proprietary Limited  (“Crown Gold”), East Rand Proprietary
  Mines Limited (“ERPM”), Ergo Mining Operations Proprietary Limited (“EMO”)
  )and  ABSA Bank  Limited (“ABSA”) ) dated  June 30, 2012.
  http://www.sec.gov/Archives/edgar/data/1023512/000120561312000150/ex4_139.htm4.9(8)
 Sale of Shares and Claims Agreement entered into by Village Main
  Reef Limited (“Village”), DRDGOLD Limited (“DRDGOLD”) (“Seller”), Business
  Venture Investments No 1557 Proprietary Limited (“Purchaser”) and
  Blyvooruitzicht Gold Mining Company Limited (“Blyvoor”) dated February 11,
  2012.
  http://www.sec.gov/Archives/edgar/data/1023512/000120561312000150/ex4_140.htm4.10(9)
 Heads of Agreement entered into by Trans-Caledon Tunnel
  Authority (“TCTA’), Ergo Mining Operations Proprietary Limited (“EMO”), East
  Rand Proprietary Mines Limited (“ERPM”) and Crown Gold Recoveries Proprietary
  Limited (“CGR”) (collectively CGR, EMO and ERPM are called “the Ergo Group”)
  dated November 28, 2012.
  http://www.sec.gov/Archives/edgar/data/1023512/000120561313000188/ex4_39.htm4.11(10)
 Share Sale and Subscription Agreement between DRDGOLD Limited
  ("DRDGOLD") and Khumo Gold SPV Proprietary Limited
  ("Khumo") dated March 17, 2014.
  http://www.sec.gov/Archives/edgar/data/1023512/000120561314000145/ex4_40.htm4.12(10)
 Share Sale and Subscription Agreement between DRDGOLD Limited
  ("DRDGOLD") and DRDSA Empowerment Trust
  (the Trust) dated March 17, 2014.
  http://www.sec.gov/Archives/edgar/data/1023512/000120561314000145/ex4_41.htm4.13(11)
 Settlement Agreement between DRDGOLD Limited
  ("DRDGOLD") and VMR Gold Investments 02 Proprietary Limited
  ("VMR Gold") dated May 28, 2015.
  http://www.sec.gov/Archives/edgar/data/1023512/000120561315000144/ex4_42.htm8.1(12)
 List of
  Subsidiaries.10.1(12)
 DRD Exchange Agreement entered into by DRDGOLD Limited (“DRDGOLD”) and
  Sibanye Gold Limited10.2(12)
 Sibanye-Stillwater Exchange Agreement entered into by Sibanye Gold
  Limited and K2017449061 (South Africa)Proprietary Limited (to be renamed WRTRP Proprietary
  Limited) and including DRDGOLD Limited (“DRDGOLD”)10.3(12)
 DRD Guarantee issued by DRDGOLD Limited (“DRDGOLD”) to and in favor of
  Sibanye Gold Limited.10.4(12)
 DRD Option Agreement between DRDGOLD Limited (“DRDGOLD”) and Sibanye
  Gold Limited.10.5(12)
 Closing and Amending Agreement, dated 20 July 2018, among Sibanye Gold
  Limited, WRTRP Proprietary Limitedand DRDGOLD Limited; each of the following annexures are
  incorporated by reference to Sibanye-Stillwater's Schedule 13-D, Exhibit 99.5
  filed with the Securities and Exchange Commission on July 31, 2018
  Annexure A — Approval of Financial
  Surveillance Department of SARB;
  Annexure B — JSE Approval of DRD Circular;
  Annexure C — TRP Approval of DRD Circular;
  Annexure D — Approval in Terms of
  Competition Act;
  Annexure E — Press Announcement Confirming
  Approval of DRD Shareholders;
  Annexure F — Environmental Authorisations
  and Waste Management Licences;
  Annexure G — Confirmation of VAT
  Registration of Issuing Party;
  Annexure H — Lender’s Consent in Terms of
  the Rand Revolving Credit Facility; and
  Annexure I — Employees of the Business as
  at the Delivery Date of the Closing and Amending Agreement.
  http://www.sec.gov/Archives/edgar/data/1023512/000110465918048791/0001104659-18-048791-index.htm10.6(12)
 Revolving Credit Facility.12.1(12)
 Certification pursuant to Section 302 of the Sarbanes‐Oxley Act
  of 2002.12.2(12)
 Certification pursuant to Section 302 of the Sarbanes‐Oxley Act
  of 2002.13.1(12)
 Certification pursuant to Section 906 of the Sarbanes‐Oxley Act
  of 2002.13.2(12)
 Certification pursuant to Section 906 of the Sarbanes‐Oxley Act
  of 2002.
 12132


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___________ (1)Incorporated by reference to our
Registration Statement (File No. 0-28800) on Form 20-F. (2)Incorporated by reference to Amendment No.
1 to our Registration Statement (File No.333-140850) on Form F-6. (3)Incorporated by reference to our Annual
Report on Form 20-F for the fiscal year ended June 30, 2000. (4)Incorporated by reference to our Annual
Report on Form 20-F for the fiscal year ended June 30, 2002. (5)Incorporated by reference to our Annual
Report on Form 20-F for the fiscal year ended June 30, 2005. (6)Incorporated by reference to our Annual
Report on Form 20-F for the fiscal year ended June 30, 2006. (7)Incorporated by reference to our Annual
Report on Form 20-F for the fiscal year ended June 30, 2010. (8)Incorporated by reference to our Annual
Report on Form 20-F for the fiscal year ended June 30, 2012. (9)Incorporated by reference to our Annual
Report on Form 20-F for the fiscal year ended June 30, 2013. (10)Incorporated by reference to our Annual
Report on Form 20-F for the fiscal year ended June 30, 2014. (11)Incorporated by reference to our Annual
Report on Form 20-F for the fiscal year ended June 30, 2015. (12)Filed herewith.    SIGNATURES  The registrant hereby certifies that it meets
all of the requirements for filing on Form 20-F and that it has duly
caused and authorized the undersigned to sign this annual report on its behalf.  DRDGOLD LIMITEDBy:
 /s/ D.J. Pretorius
  D.J. Pretorius
  Chief Executive OfficerBy:
 /s/ A.J. Davel
  A.J. Davel
  Chief Financial OfficerDate: October 31, 2018
 12232


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12332


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