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DRDGOLD to explore for gold in Zimbabwe

Johannesburg, South Africa — MININGREVIEW.COM — 23 April 2010 – South Africa’s No. 4 gold producer, DRDGOLD Limited, boosted third-quarter output 4% and said it would start exploring for gold in Zimbabwe, but its shares fell on weaker headline earnings.
Reuters reports that shares in the company, a mid-tier, unhedged gold producer, fell 1.79% against a rise in shares of its bigger gold mining rivals, which sent the gold mining index higher.

Headline earnings “’ the key profit measure in South Africa, stripping out capital, non-trading and some extraordinary items “’ fell to 0.4 cents per share from 1.4 cents in the second quarter, after accounting for some administrative costs.

“Investors are disappointed with the headline earnings; the market expected better, and I expected 7 cents a share,” said Stephen Roelofse, a gold analyst at Metropolitan Asset Managers.

DRDGOLD posted an 11% rise in cash operating profit for the quarter at R96.9 million, while cash operating unit costs fell 1 percent to 221 400 per kg.

Improved gold mining at its Blyvoor underground operations and Ergo mine boosted DRDGOLD’s output to 62 404 ounces in the third quarter, the company said in a statement issued here.

DRDGOLD’s bigger rivals, AngloGold Ashanti, Gold Fields and Harmony Gold Mining Co. are due to release their end-March results in May.

DRDGOLD has become one the rare foreign companies to show interest in Zimbabwe. The South African-focused company’s exploration in Zimbabwe would be done via a 50/50 venture with a Zimbabwean company, Chizim Investments. Some limited mining will take place during the initial 28-week exploration, with any recovered gold helping to offset exploration costs, the company said.

“The exploration company we have contracted has already started establishing a site in the area, which is a gold mining territory near the town of Norton, southwest of Harare,” CEO Niel Pretorius told Reuters.