HomeGoldDRDGOLD's operating profit up 37%

DRDGOLD’s operating profit up 37%

surface gold tailings
retreatment operation
Johannesburg, South Africa — 12 February 2012 – DRDGOLD Limited CEO Niël Pretorius says the company has reported “satisfactory” results for the quarter ended 31 December 2012, reflecting a “solid performance” from surface retreatment subsidiary Ergo.

In his report to shareholders for the second quarter and six months ended 31 December 2012, Pretorius commented: “Consequently, we are delighted to declare an interim dividend of 14 South African cents per ordinary share,” Pretorius said A 37% increase in operating profit to R238.7 million had resulted from a 9% increase in gold production to 39,031oz and a 7% increase in the average Rand gold price received to R478,309/kg. Cash operating costs were 12% lower at US$1,017/oz.

Headline earnings per share increased by 25% to 25 South African cents per share.

Pretorius added that Ergo’s “next growth chapter” – the flotation/fine-grind circuit, currently under construction, and expected to improve extraction efficiencies by between 16 and 20% –had accounted for most of the R103.5 million capital expenditure incurred in the quarter.

A further R94 million was likely to be spent on the new circuit over the next two quarters, he said, with attainment of full throughput expected on schedule by the end of FY2013, in spite of a slight delay in the arrival of the mills from Canada.

Turning to DRDGOLD’s ERPM asset, Pretorius said its Cason Shaft had been refurbished and re-commissioned at a cost of R12 million, and a 6,000tpm plant had been constructed at a cost of R13 million.

“We expect these to make ERPM self-sustaining, in order to support the cost of additional underground exploration required to add value to the current inferred gold resource of approximately 21Moz. This asset is now for sale.”

Pretorius said that – in respect of four of the five prospects held by its ChizimGold Joint Venture in Zimbabwe – underground mining was indicated; and as this did not feature in DRDGOLD’s strategy, these prospects would be packaged for disposal. Prospects for gold tailings reclamation in the country were being evaluated currently.

Looking ahead, Pretorius said DRDGOLD’s priority remained delivery on its FY2013 targets. In Q3 and Q4, there would be continued focus on maintaining Ergo’s tonnage volumes and on completion of the flotation/fine-grind circuit.

Source: DRDGOLD Limited. For more information, click here.