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CAPITAL MANAGEMENT
 12 Months Ended
Jun. 30, 2022
Capital management [abstract]  
Capital Management
20
 
CAPITAL MANAGEMENT
The
 
primary
 
objective
 
of
 
the
 
Group's
 
capital
 
management
 
policy
 
is
 
to
 
ensure
 
that
 
adequate
 
capital
 
is
 
available
 
to
 
meet
 
the
requirements
 
of
 
the
 
Group
 
from
 
time
 
to
 
time,
 
including
 
capital
 
expenditure.
 
The
 
Group
 
considers
 
the
 
appropriate
 
capital
management strategy for specific growth projects as and when required. Lease liabilities are not considered to be debt.
Liquidity management
At June
 
30, 2022
 
and June
 
30, 2021
 
the Group’s
 
facilities included
 
an undrawn
 
Revolving Credit
 
Facility (“
RCF
”) which
 
was
initially secured
 
to finance
 
the development
 
of Phase
 
1 of
 
FWGR as
 
well as
 
the general
 
working capital
 
requirements of
 
the
Group. In December 2018, R
125
 
million of the RCF was committed to issue a guarantee to Ekurhuleni Local Municipality (refer
note 24).
 
In September 2020, the initial R
300
 
million RCF was amended to a R
200
 
million RCF and extended for an additional term of 2
years with a final repayment date of
September 14, 2022
.
 
The
 
initial
 
and
 
amended
 
RCF
 
permits
 
a
 
consolidated
 
debt
 
ratio
 
(net
 
debt
 
to
 
adjusted
 
EBITDA)
 
of
 
no
 
more
 
than
2:1
 
and
 
a
consolidated interest coverage ratio
 
(net interest to adjusted
 
EBITDA) of no less
 
than
4:1
 
calculated on a twelve-month
 
rolling
basis respectively. Management monitors
 
the covenant ratio
 
levels to ensure
 
compliance with the
 
covenants, as well
 
as maintain
sufficient facilities to ensure satisfactory liquidity for the Group. The covenant ratios were not breached as at or during the year
ended June 30, 2022 or June 30, 2021.
The amendment
 
included the
 
reduction of
 
the initial
 
interest rate
 
margin of
3.25
% to
2.75
%. A
 
pledge and
 
cession of
 
DRDGOLD’s
shares in
 
and shareholder
 
claims against
 
Ergo Mining
 
Proprietary Limited
 
and Far
 
West Gold
 
Recoveries Proprietary
 
limited
remains
 
in
 
place
 
as
 
security
 
for
 
the
 
RCF.
The
 
amended
 
RCF
 
does
 
not
 
include
 
any
 
commitment
 
towards
 
the
 
guarantee
 
to
Ekurhuleni Local Municipality.
No amounts
 
were drawn
 
under this
 
facility as
 
at June
 
30, 2022.
 
Pursuant to
 
the Group
 
having started
 
to evaluate
 
its funding
structure for its expanded budgeted capital expenditure programme in future years, a decision was made to not renew the RCF.