DRDGOLD reports 27% increase in operating profit, reflecting 11% rise in gold production
15 February 2018
Johannesburg, South Africa. 15 February 2018. DRDGOLD Limited (DRDGOLD; JSE, NYSE: DRD) has reported a 27% increase in operating profit to R219.9 million and declared an interim dividend of five cents per share for the first six months of FY2018, ended 31 December 2017.
CEO Niël Pretorius says improved operating profit was as a result of an 11% increase in gold produced – a consequence of a 15% rise in the average yield to 0.191g/t – and in spite of a 4% drop in the average Rand gold price received to R547 653/kg.
Higher yield, he says, was achieved both from improved performance at the Ergo plant – reflecting further benefits flowing from the plant’s automated monitoring system – and from a more stable flow of material to the plant.
Contributing to the latter was the start of reclamation from two new sites and the final shutdown of the Crown plant. Lower throughput in the period under review, Pretorius says, will be addressed going forward by the commissioning of yet another new reclamation site.
Cash operating costs were 8% lower at R451 689/kg and all-in sustaining costs 7% lower at R500 125/kg.
Significant savings in working costs continued to be achieved, Pretorius says, mainly in respect of the use of re-agents – due to the Ergo plant’s improved performance – and of water. The Central Water Treatment Facility now in operation has reduced by 51% the volume of potable water sourced from external sources, resulting in a 41% saving in the cost of potable water, in spite of a 13% tariff increase.
Looking ahead, Pretorius says a new zinc precipitation circuit will come into operation at the Ergo plant in order to improve the elution circuit efficiency; also, two new ball mills will be commissioned to allow higher grade sand to be added to the blend.
Commenting on the proposed WRTRP transaction with Sibanye-Stillwater announced in November last year, Pretorius says:
“We are firing on all cylinders to get the transaction circular out, and will follow this up with information sessions to put colour to the key features.
“We are very excited about this project and believe the market will share our excitement once the details are clear.”
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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 2017, which we filed with the United States Securities and Exchange Commission on 31 October 2017 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.