51% Increase in operating profit
25 October 2012
Johannesburg, South Africa. 25 October 2012. DRDGOLD Limited (DRDGOLD; JSE, NYSE: DRD) announced a 51% increase in operating profit from its continuing operation, Ergo, to R173.7 million for the quarter ended 30 September 2012, resulting from an increase in gold production, well contained costs and a higher Rand gold price received.
Group results for the quarter under review are the first to reflect DRDGOLD’s performance as a gold surface retreatment-focused company, control of Blyvooruitzicht Gold Mining Company Limited (Blyvoor) having passed to Village Main Reef Limited (Village) during the previous quarter. Consequently, they are not directly comparable with those of the previous quarter.
Ergo’s gold production rose 11% to 35 815oz, the result of a 1% increase in volume to 5 598 000t and an 11% increase in overall yield to 0.20g/t. Higher volume reflects continuing stabilisation in the operating performance of the Crown/Ergo pipeline and completion of the closure of the Crown plant. Improved overall yield was due to the significantly higher yield of material recovered from the Cason Dump.
Cash operating costs were well contained to a 1% increase at R305 265/kg, in spite of two months payment of Eskom’s winter tariff – a 60% premium to the normal rate – and implementation of wage increases.
Capital expenditure, 6% higher at R81.4 million, was directed mainly towards the flotation/fine-grind project at Ergo’s Brakpan plant, which is progressing on schedule and on budget.
Looking ahead, DRDGOLD CEO Niël Pretorius says DRDGOLD’s two principal priorities for the foreseeable future remain steps to bring steady state to the consolidated Ergo circuit and delivering on the flotation/fine-grind project timeline.
The uranium feasibility study is continuing, with the outcome of test work being conducted by Mintek awaited.
In terms of sustainable development, Pretorius says water consumption and human and social development remain at the forefront of the company’s strategic planning and implementation.
South Africa & North America
James Duncan, Russell and 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)
For more information, please visit www.drdgold.com
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 2011, which we filed with the United States Securities and Exchange Commission on 28 October 2011 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 statement included in this report have not been reviewed and reported on by DRDGOLD’s auditors.