HomeGoldDRDGOLD production rises

DRDGOLD production rises

DRDGOLD’s Blyvoor
underground mine
Johannesburg, South Africa — MININGREVIEW.COM — 22 October 2010 – South African gold miner DRDGOLD Limited (DRD) – a medium-sized gold producer with several operations and exploration activities in Southern Africa – has reported a 6% increase in gold production to 65 267oz for the quarter ended 30 September 2010, reflecting increasing stability in the underground operations of the company’s Blyvoor operation, and a stable performance by both of its surface retreatment-only operations, Crown and Ergo.

A company results statement issued here said that at Blyvoor, continued opening up and development in the wake of extensive seismicity-induced damage to high grade underground working areas in the previous financial year, had yielded a 15% increase in underground gold production to 24 101oz.

It added that operating profit was R22.1 million lower at R69.4 million due to both a lower Rand gold price of R288 054/kg, and an 11% increase in total cash operating costs to R520.7 million.

The statement said that cost drivers during the quarter were power – in particular, power utility Eskom’s higher winter surcharge which it levied for three months on top of its normal tariff – and annual wage increases.

DRDGOLD CEO Niël Pretorius pointed out that the higher winter power surcharge had added R27.8 million to cash costs.

Cash operating profit would have been R97.2 million – 6% higher than in the previous quarter – but for “this peculiar practice on the part of Eskom, for which we receive no value,” he added.

Looking ahead, Pretorius said that the Group expected to continue to operate in an environment characterised by a strong gold price, which would assist in offsetting power and labour cost pressures.

In Zimbabwe, Chizim Gold – DRDGOLD’s joint venture with Zimbabwe-based Chizim Investments – has again increased its number of claims at Leny, on the Zimbabwe Greenstone Belt. These now total 61, covering 602ha.