JSE- and NYSE-listed DRDGOLD reported its results for the quarter and nine months ended 31 March 2014, revealing that gold production through March is down 11%, all-in sustaining costs (US$/oz) through March are down 3%, while the company’s cash balance up R8 million to R207 million.
This is due to metallurgical problems in the Ergo treatment plant near Springs. As such, the company has highlighted various measures, some already initiated and some planned, to address the challenges it experienced in the commissioning of the new high grade section of its Brakpan plant.
Gold production for the first nine months of FY2014 was therefore 11% lower than for the comparable period of FY2013, prompting the company to declare “time-out” for the new high grade section early in April, says CEO Niël Pretorius.
As a result of the suspension of the high grade section, the established low grade (carbon-in-leach) section of the Brakpan plant – impacted negatively by the high grade section’s under-performance – has been restored to steady state. In April, gold production was up 21% month-on-month, while the negative all-in cash flows experienced in March were reversed.
Now and looking ahead, Pretorius says new, higher grade material for retreatment is being sourced to supplement yield, while water balance management and carbon inefficiencies, together with electricity supply risk, are being addressed through engineering and infrastructure upgrades, as well as new management procedures and protocols.
“The high grade section will then be tested in closed circuit to prove the extraction process, before it is re-introduced,” Pretorius says.
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