DRDGOLD Annual report 2009

Chairman’s letter

Geoffrey Campbell

A few months ago I was struck by an aerial photograph of our Top Star dump in downtown Johannesburg. It illustrates the changing nature of our business.

It is an honour and a pleasure for me to report on my first year as CEO of DRDGOLD, a year with its share of challenges, but also a year in which significant strides were made in realising our vision for the company.

Review of operations

In 2009, DRDGOLD’s gold production decreased by 23% to 247 690 ounces from 321 432 ounces in 2008.The main reasons for this decline in production were the suspension of underground mining at ERPM in the second quarter and the downward adjustment to throughput at Crown as part of the decommissioning of the Crown Tailings Deposition Facility.

Total operating costs for continuing operations were 40% higher at R219 024/kg compared with R156 891/kg in 2008. Operating profit was 27% lower at R223.4 million (2008: R305.7 million). Capital expenditure amounted to R346.7 million compared with R371.4 million in 2008.

Financial highlights

	2009	2008
Gold
Attributable production (oz)
Total operations	247 690	321 432
Continuing operations	247 690	321 432
Average operating cost ($/oz)
Total operations	753	692
Continuing operations	753	667
Average spot price ($/oz)	873	821
Average price received ($/oz)	861	817
Financial
Revenue ($m)
Total operations	211.2	264.4
Continuing operations	211.2	252.2
Gross profit from operating activities ($m)
Total operations	8.5	26.7
Continuing operations	8.5	33.6
Profit/(loss) before tax ($m)
Total operations	9.1	(12.0)
Continuing operations	9.1	11.8
Profit for the year ($m)
Total operations	12.2	167.5
Continuing operations	12.2	21.1
Basic profit per share ($/cents)
Total operations	211.2	264.4
Continuing operations	12.2	21.1