DRDGold has announced a 4% increase in operating profit to R172.6 million for the six months to 31 December 2016 compared with the six months to 31 December 2015.

DRDGold said a rise in the average rand gold price helped to offset the impact of lower production as the company continued to focus on the extensive pre-closure clean-up at its veteran Crown operation.

Gold production during the period under review was 7% lower at 2 100 kg, reflecting a 2% decline in throughput to 12 632 000 t and a 6% decline in yield to 0.166 g/t.

Besides the Crown clean-up, operations in the six months were also affected first by dry conditions and low water quality, and then by flash floods.

Cash operating unit costs increased by 14% to R490 531/kg due mainly to lower gold production, but other contributors were an average 8.5% increase in wages, and a 9% and 14% rise in the cost of electricity and water respectively.

A headline loss of R10.2 million (2.4 South African cents per share) was recorded compared with headline earnings of R10.9 million (2.6 South African cents per share), due mainly to accelerated depreciation and retrenchment costs of R18 million each, associated with the Crown clean-up.

New reclamation sites

Two new reclamation sites have been commissioned in recent weeks. Reclaimed slimes from 4L2 alongside the M2 freeway, south east of Johannesburg’s centre – which contains 11.9 Mt grading at 0.30 g/t – will report to the City Deep plant at a rate of 300 000 tpm, and then to the Ergo plant for gold extraction.

Reclaimed slimes from 4L37 in Ekurhuleni, which contains 7.2 Mt grading at 0.28 g/t, will report directly to the Ergo plant at a rate of 300 000 tpm for gold extraction for a period of 24 months.

Two other slimes dams – 4L50, containing 20.3 Mt grading at 0.26 g/t and 7L15, containing 17.1 Mt grading at 0.26 g/t – are currently being assessed in order to decide which should be prioritised for reclamation.

DRDGold CEO Niël Pretorius says the new reclamation sites are expected to enhance consistency in volume delivery and to come in at a much lower unit cost than the sites associated with the Crown clean-up.

Sustainable development

DRDGold’s new Central Water Facility on the footprint of the ERPM high-density separation water treatment plant in Ekurhuleni will be commissioned by the end of March 2017, and will provide the two days’ water storage required for the City Deep and Knights operations.

Total environmental expenditure for the six months was R26.1 million, most of which was directed towards the vegetation of 10 ha on the Brakpan/Withok tailings storage facility, 5 ha on the Daggafontein tailings storage facility and 10 ha on the Crown tailings complex.

Despite very dry weather conditions until November, dust exceedances for the six months were very low – four out of a total of 588 readings (0.7%).

During the period under review, approval was received from the National Nuclear Regulator and the Gauteng Department of Agriculture and Rural Development for the redevelopment of the cleared 4L8 site, post rehabilitation, where about 90 ha of prime land is available.