DRDGold operates more on the surface than below.

HILTON TARRANT: Niel Pretorius is the chief executive of DRDGold SA and is with us in the studio. Niel, reporting numbers for the second quarter to December today. Over the past few years - for listeners and investors who might not have been invested in DRDGold or might have remembered a DRDGold from an earlier time - you've been transitioning pretty much to a surface operator. How far is that? I suppose some might jokingly say or ask whether we can actually indeed call you a miner. What percentage of your operations are above ground versus below ground?

NIEL PRETORIUS: 73% of our total gold production is now from the reclamation of old tailings. So yes, I think we've become a processor more than a miner in certain respects.

HILTON TARRANT: One of the big tailings dumps that you are reprocessing, the old Top Star Drive-In in southern Johannesburg - I was shocked this past weekend to be standing at Turffontein and I looked up at Top Star Drive-In and there is almost nothing left.

NIEL PRETORIUS: Yeah, we move 1.8m tons of material a month and if you add that up you see how very quickly a very large hole develops on the side of a tailings dam. Yes, it's quite impressive how quickly the operational guys move the side wall of these reclamation sites back.

HILTON TARRANT: Niel, looking at your costs, you managed to bring your costs down in the quarter. A lot of that has to do with the electricity summer tariff versus winter tariff. In terms of this current quarter and the following quarters, is there scope to bring those costs down even further?

NIEL PRETORIUS: I think we've cut most of our operations and then also the corporate office down to the bone. The last quarter was one of restructuring at ERPM, at Blyvoor. We've got just over 350 fewer employees at operational level, and the corporate office has also shrunk by a third. So I think there's not much room to save costs there. It's now really just a matter of positioning the company in such a way that's less sensitive to these external cost drivers and external cost dynamics - the important one being electricity of course.

HILTON TARRANT: The big one - Eskom proposing an electricity hike of 35% increase this year, next year and into 2012. I asked Hannes Meyer of Harmony and Nick Holland of Gold Fields this exact same question - what does that do to your business?

NIEL PRETORIUS: Well, I think most underground mines will need an increase in the gold price in order to absorb that, because most underground mines I think have been very tight on costs, and exercise almost clinical discipline when it comes to cost-cutting measures and cost management. On the surface side, we use fewer units of electricity per units of gold produced, so I think we've got a little more margin. But it still does do harm to our margin, without any doubt. So I'm hoping that we'll see sanity prevail and a different approach to the capitalisation of Eskom.

HILTON TARRANT: Niel, one of the more positive bits of news out this morning was your tentative steps into Zimbabwe - take us though that.

NIEL PRETORIUS: Zimbabwe I think is a country that's sitting on just enormous mineral potential and, if we leave it too late new countries, new jurisdictions will stake their claim and we will not benefit from it. So what we've decided to do is to establish relationships in Zimbabwe, see if we can secure some assets, start exploring those assets. We won't be spending more than about R5m initially just to set it up and gather data. And, as and when the situation changes in Zimbabwe, hopefully we'll be able to hit the ground running.

HILTON TARRANT: The outlook for the current quarter?

NIEL PRETORIUS: Well, unless something wanders in from left field, I don't foresee any big surprises. You'll have seen in the presentation that we did to the market earlier today that the trending generally in most of our circuits is positive and encouraging.

HILTON TARRANT: Niel Pretorius is the chief executive of DRDGold SA.

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