Johannesburg, South Africa —MININGREVIEW.COM — 20 August 2009 – South Africa’s fourth biggest gold producer, DRDGold Limited, has revealed that its annual gold production for the year ended 30 June 2009 has fallen by 20% after output at a key mine was suspended, while higher costs eroded its profits.
Looking ahead, company CEO Niel Pretorius said DRDGold would improve its underground operations to boost output. “We have the means to grow our lower-risk, lower-cost, higher-margin surface footprint,” he said.
DRDGold revealed that total gold production for the year had fallen to 247 690 ounces, after underground mining had been suspended at its ERPM operation in the second quarter, and because of the downward volume adjustment at its Crown mine where a section was decommissioned.
The company “’ a mid-tier, unhedged gold producer “’ said despite higher annual revenue, operating profit fell 26% to R283 million after an 11% rise in operating costs.
Revenue rose 4% to R1.9 billion rand, reflecting a 30% increase in the average rand gold price received for the year to R250 589 rand/kg.
Headline earnings – the key profit measure in South Africa, stripping out capital, non-trading and some extraordinary items “’ rose to 33.8 cents per share against 30 cents last year, the company added in a statement.
DRDGold declared a final dividend of 5 South African cents per ordinary share for the year, compared with the final dividend of 10 cents per share for the previous year, citing the need to conserve cash in the face of a stronger rand, which could impact its future earnings.
Pretorius said that to boost output the company would repair higher-grade panels at its Blyvoor mine, which had been damaged by seismic activity. The company would shut its ERPM underground operation, which was currently on care and maintenance.