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DRDGold profits up

DRDGold’s Ergo
joint venture
Johannesburg, South Africa — MININGREVIEW.COM — 09 February 2009 – DRDGold Limited – the fourth-largest gold producer in Africa – has reported a 65% increase in operating profit to R94.3 million, and a 30% rise in headline earnings per share to 13.6 South African cents for the quarter ended 31 December 2008.

The announcement released here added that an 18% increase in the average gold price received to R255 213 per kg, and a 2% decrease in cash operating costs to R406.9 million, offset the impact of a 15% decline in gold production to 60 057 oz.

It added that lower gold production was mainly due to a 45% drop in production at ERPM – the result of a decision to suspend underground mining there with effect from the end of October 2008.

Commenting on DRDGold’s Ergo joint venture, newly appointed CEO Niel Pretorius said: “We are very pleased with the progress achieved on Phase 1. Commissioning of the first carbon in leach circuit at the Brakpan plant began on schedule during the December quarter and the project is thus well placed to achieve the 600 000 tpm throughput planned by April 2009. None of our key operating assumptions in respect of Ergo to date have proven flawed,” he added.

Pointing to world economic conditions, Pretorius said: "These uncertain times may continue to provide the ‘safe haven’ attraction of gold."

He went on to say that Ergo was coming to fruition now, and should therefore benefit from the higher gold price. He was also pleased that the Top Star project was finally up and running, to take advantage of the current gold price trend.

“With the global liquidity squeeze, we will remain cautious of long lead capital projects, and will avoid projects that we cannot fully cover with the cash and facilities that we have at hand. DRDGOLD will be taking a very disciplined approach to growth,” Pretorius concluded.