DRDGOLD declares final dividend
05 September 2017
‘Well positioned for FY2018 and beyond’
Johannesburg, South Africa. 5 September 2017. DRDGOLD Limited (DRDGOLD; JSE, NYSE: DRD) has declared a final dividend of 5 South African cents per share for the year ended 30 June 2017 – a year CEO Niël Pretorius describes as having been challenging but which involved steps to position the company well for FY2018 and beyond.
In a shift of its operational centre of gravity to the central and eastern Witwatersrand necessitated by depletion of resources in the west, Pretorius says the recovery of material from a number of legacy reclamation sites and closure of the Crown plant were completed during the year.
Also, three new reclamation sites in the centre and to the east were commissioned and preparation was started for the commissioning of a fourth by the third quarter of FY2018.
The cost and time required to mechanically reclaim material from the legacy sites were greater than anticipated. This, together with the knock-on effect of treating the low-volume material through the normal gold recovery circuit and a drop in the average gold price received combined to impact negatively on the company’s operating and financial performance for the year, Pretorius says.
Gold production was 4% lower at 4 265kg, reflecting a 5% drop in the average yield to 0.171g/t.
Operating profit was 41% lower at R256.8 million, after accounting for a 5% increase in total cash operating costs to R2 087.9 million.
During the year, costs were rigorously addressed for the longer term, Pretorius says.
Work to centralise water distribution and adjustments to the Ergo plant’s water reticulation system are expected to yield a saving in the cost of water used of some R24 million a year.
More cost benefits are expected to flow from the sweating of the Ergo plant’s electronic monitoring system to improve plant efficiency. A saving of R1.3 million a month in the cost of reagents has already been recorded.
On sustainable development during the year, Pretorius says:
- only five dust exceedances were measured compared with 22 in the previous year, reflecting the positive impact of the company’s ongoing dump vegetation programme;
- total water usage dropped by 8% and usage of externally sourced potable water by 26%, pointing to the success of water distribution system improvements;
- 90 hectares of land were cleared for redevelopment compared with 62 in the previous year;
- the number of women in the workforce rose to 20% of the total; and
- R14.3 million was spent on various community and skills development projects, mainly within DRDGOLD’s operating footprint.
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Forward looking Statements
Many factors could cause the actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, adverse changes or uncertainties in general economic conditions in the markets we serve, a drop in the gold price, a sustained strengthening of the Rand against the Dollar, regulatory developments adverse to DRDGOLD or difficulties in maintaining necessary licenses or other governmental approvals, changes in DRDGOLD’s competitive position, changes in business strategy, any major disruption in production at key facilities or adverse changes in foreign exchange rates and various other factors. These risks include, without limitation, those described in the section entitled “Risk Factors” included in our annual report for the fiscal year ended 30 June 2016, which we filed with the United States Securities and Exchange Commission on 31 October 2016 on Form 20-F. You should not place undue reliance on these forward-looking statements, which speak only as of the date thereof. We do not undertake any obligation to publicly update or revise these forward-looking statements to reflect events or circumstances after the date of this report or to the occurrence of unanticipated events. Any forward-looking statements included in this release have not been reviewed and reported on by DRDGOLD’s auditors.