DRDGOLD reports higher gold production, lower costs, increased profit
23 April 2010
Johannesburg, South Africa. 23 April 2010. DRDGOLD Limited (JSE: DRD; NASDAQ: DROOY) today reported an 11% increase in cash operating profit for the quarter ended 31 March 2010 to R96.9 million, reflecting a 4% rise in total gold production to 62 404oz and a 1% drop in cash operating unit costs to R221 400/kg. The average Rand gold price received was just 1% higher at R269 980/kg.
Higher gold production was a result of improved recoveries at Blyvoor’s underground operations during the period under review – negatively affected by seismic damage, strike action and power tariff increases during 2009 – and of the on-going production build-up at Ergo.
At Blyvoor, underground gold production for the quarter rose by 31% to 21 412oz, reflecting a 21% increase in underground throughput to 166 000t and an 8% improvement in underground yield to 4.01g/t. Subsequent to the end of the quarter, based on this improved performance, the High Court approved DRDGOLD’s application to lift the provisional judicial management order in place in respect of Blyvoor since November 2009.
Ergo’s gold production for the quarter rose by 3% to 9 773oz, reflecting an 11% improvement in yield to 0.10g/t and a 1% increase in throughput to 3 150 000t. Progress towards Ergo’s Phase 1 volume target of 1.2Mtpm and head grade target of 0.32g/t continues, the commissioning of a second feeder line from the Elsburg Tailings Complex to the Brakpan plant bringing these well within reach.
Looking ahead, DRDGOLD CEO Niël Pretorius says the company’s priorities will be achieving a full restoration of Blyvoor’s underground recovery grades and developing synergies between its Ergo and Crown surface retreatment operations.
In Zimbabwe, preparations for an initial 28-week programme of exploration of the Leny claims, jointly held by DRDGOLD and Zimbabwe partner Chizim Investments (Chizim), have begun. Limited mining will take place during exploration, with any recovered gold helping to offset exploration costs. Chizim conducted limited exploration of two Leny veins in 2009, which showed grades varying between five and 25g/t.
South Africa & North America
James Duncan, Russell & Associates
+27 11 880 3924 (office)
+27 82 892 8052 (mobile)
Investor and Media Relations
Phil Dexter, St James's Corporate Services
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+44 779 863 4398 (mobile)
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 continuing strengthening of the rand against the dollar, regulatory developments adverse to DRDGOLD or difficulties in maintaining necessary licences 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 2009, which we filed with the United States Securities and Exchange Commission 27 November 2009 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.