Higher gold production, Rand gold price contributes to 16% increase in operating profit
23 April 2015
Power stability delivers stronger throughput
Johannesburg, South Africa, 23 April 2015. DRDGOLD Limited (DRDGOLD; JSE, NYSE: DRD) reported a 16% increase in operating profit to R97.6 million for the quarter ended 31 March 2015, reflecting higher gold production and sales, and a stronger average rand gold price received.
Gold production and sales were both 2% higher at 36 877oz, and the average gold price received was 6% higher at R461 683/kg.
DRDGOLD CEO Niël Pretorius, commenting on completion of test work on the Ergo plant’s flotation/fine-grind (FFG) circuit, says the second and third sets of float cells were started up in January and became fully operational late in February.
Although some desorption occurring in the carbon-in-pulp (CIP) circuit caused carbon adsorption efficiencies to settle at a level marginally lower than the design parameters of the plant, the overall target to reduce residue grade by 0.03g/t was achieved, resulting in record gold production for the month of March. The average, overall yield was stable at 0.197g/t.
The load reduction arrangement reached with Eskom and announced last quarter meant that reductions in throughput due to power supply constraints were negligible, while back-up generators installed in the second half of 2014 kept the circuit stable on the few occasions that power to the Ergo plant was cut. Total throughput was 3% higher at 5 826 000t.
Total cash operating costs were 7% higher at R436.5 million due to higher throughput.
Looking ahead for the next few months, Pretorius says the company will have a four-fold focus:
- an overhaul of the asset maintenance system to avoid unnecessary interruption to production due to breakdowns and the co-ordiante maintenance over the entire circuit;
- refurbishment of the remaining five carbon-in-leach (CIL) tanks at Ergo to raise volume capacity by some 300 000tpm, and starting up reclamation from the Van Dyk site;
- construction of the Rondebult water plant and pipeline to supplement water supply to the operations;
- and conversion of the high-grade CIP circuit to CIL to optimise leaching and adsorption in the high-grade circuit.
- Report to shareholders for the second quarter ended 31 March 2015 (PDF - 1MB)
- Presentation: Results for the quarter ended 31 March 2015
- Webcast: Results presentation
South Africa & North America
James Duncan, Russell and Associates
+27 11 880 3924 (office)
Investor and Media Relations
Phil Dexter, St James’s Corporate Services
+44 (0) 20 7796 8644 (office)
+44 (0) 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 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 integrated report for the fiscal year ended 30 June 2014, which we filed with the United States Securities and Exchange Commission on 31 October 2014 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 report have not been reviewed and reported on by DRDGOLD’s auditors.