DRDGOLD announced today that it has temporarily suspended its recently constructed high grade section – a flotation circuit, a set of fine-grind mills and the cyanide leach and carbon in pulp (CIP) circuit – to determine the cause of the metallurgical problems that have led to lower than expected gold production for Q3 FY14.

Although the new FFG technology, introduced to liberate more gold and increase recoveries by between 16% to 20%, has achieved positive float and grinding results, the CIP section has not yet stabilised and appears to have also contributed to metallurgical instability and carbon inefficiencies downstream in the existing carbon in leach (CIL) circuit or low grade section.

Suspending the new section will enable the operational team to stabilise the low grade circuit and to determine the factors that could be affecting carbon efficiencies in both circuits. The company expects the original lower-grade CIL circuit to be settled within a month. The subsequent test work is likely to be completed within a further three to four month period.

Incessant rains during February and March and surges, dips and interruptions in the power supply during this period have also negatively impacted both the high grade and low grade sections, contributing to the metallurgical instability of both sections.

The Ergo team will therefore make use of the down-time to install drain valves to prevent silting up of the float cells during future power fluctuations, and auxiliary power units to thickener underflow pumps to prevent silting up of thickeners during these trip-outs.

Currently both carbon circuits of the plant – the higher grade CIP and the lower grade CIL – are unstable and are operating well below target range.

As a result of these metallurgical inefficiencies and the resultant high dissolved gold losses, gold production for the quarter ended March 2014 is estimated to be 14% lower compared to the preceding quarter, and all-in sustaining unit costs are estimated to be up by 24% quarter on quarter.

Because of a higher gold price and lower total operational and capital expenditure, the company’s cash balance remained virtually unchanged quarter on quarter.

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