HomeGoldDRDGold ups production for the 2015 financial year

DRDGold ups production for the 2015 financial year

JSE- and NYSE-listed surface gold miner DRDGold has increased its gold production by 13% for the year ended 30 June 2015 to 150 145 oz, compared with 132 909 oz produced in the previous year.

DRDGold also declared a final dividend of R0.10 per share for the period – the eighth consecutive final dividend declared and a five-fold increase on the final dividend declared in the 2014 financial year.

The improved dividend flows from what CEO Niël Pretorius describes as “very satisfactory results” for the 2015 financial year.

During the year under review, the company also boosted operating profit, which increased by 48% to R384.3 million, assisted also by a 4% rise in the average rand gold price received.

Revenue increased by 16% to R2 105.3 million and, after accounting for total cash operating costs (including the negative impact of Eskom’s higher winter tariffs in the last quarter), was 13% higher at R1.741.6 million.

Yield, which was up 14% to 0.197g/t, drove improved gold production and reflected a sharp turnaround in the performance of the Ergo plant.

Looking ahead to the 2016 financial year, Pretorius says the company’s focus will be to fully integrate the new high-grade flotation fine grind (FFG) and established low-grade carbon-in-leach (CIL) circuits.

Strong quarter-on-quarter improvements

The company ended the 2015 financial year strongly, with substantially improved final quarter-on-quarter comparisons. Gold production was 9% higher at 40 253oz, due mainly to a 9% rise in throughput to 6.33 Mt. This resulted from delivery on previously-announced plans to improve the availability of infrastructure, the commissioning of new reclamation sites, and drier winter weather conditions.

Operating profit was 26% higher at R122.6 million, a result of the higher gold production, the lower cash operating cost performance, and a slightly higher rand gold price received.

In terms of the work undertaken at its Ergo plant for the year DRDGold undertook work to integrate the new FFG circuit with the older CIL circuits at Ergo’s Brakpan plant and was rewarded with an increasingly stable operational environment during the year. In doing so, the delivery of performance from the FFG circuit within the parameters of what the company had anticipated at the outset.

The company agreed with power utility Eskom an arrangement to better deal with the vicissitudes of its load-shedding, the company internally developed its own system that provides constant monitoring of power consumption across its entire operating footprint and is now able, when alerted by Eskom, to reduce our power consumption by switching off non-essential equipment. This ensures that Eskom keeps DRDGold’s power on, so it can maintain an acceptable level of operation.

Meanwhile, in line with its stated intentions at the end of last quarter, DRD has worked on and all but completed:

  • a full overhaul of its asset management system to avoid unnecessary interruptions to production due to breakdowns, and institution of co-ordinated maintenance over the entire circuit;
  • refurbishment of the remaining five CIL tanks at Ergo, which will raise the plant’s volume capacity by approximately 300 000t per month to 2.1Mt per month;
  • commissioning of the new Van Dyk and 4A6 reclamation sites;
  • construction of the Rondebult water plant and pipeline to supplement water supply to our operations from the Rondebult sewage farm; and
  • conversion of the high-grade carbon-in-pulp (CIP) circuit to CIL, in order to optimise leaching and adsorption in the high-grade circuit.

Top Stories:

Evraz Highveld Steel and Vanadium to reveal preferred bidder this week

Illegal, underground strike action at Sibanye Driefontein gold mine

African mining sector landscape improving thanks to extensive legislative reform

Chantelle Kotze
Chantelle Kotze is a Johannesburg-based media professional. She is a contributor at Mining Review Africa (Clarion Events - Africa) and has created content for the media brand over the past 6 years.