In the media

DRDGOLD reports jump in third-quarter profit

[Miningweekly] - Gold production from JSE-listed DRDGOLD fell a further 9% in the March quarter, although the record gold price achieved during the period boosted the company’s net profit by 56% to R132-million - up from R84,5-million in the December quarter.

Gold production from JSE-listed DRDGOLD fell a further 9% in the March quarter, although the record gold price achieved during the period boosted the company’s net profit by 56% to R132-million - up from R84,5-million in the December quarter.

Headline earnings a share made a significant jump from 2,4c a share in the December quarter, to 27,5c a share in the quarter under review.

The company’s output fell from 77 259 oz in December to 70 378 oz in March, after power constraints curbed output.

"We estimate that, had it not been for the power cuts, our operations would have produced an additional 3 000 oz," DRDGOLD CEO John Sayers said in a statement.

In the nine months to March 2008, the group produced 250 221 oz of gold, compared with 386 090 oz for the comparable period in 2007.

"Provided that Eskom is able to continue to supply power at 95% of its previous level and to continue to give notice of impending cuts, we remain optimistic that - all other operational factors remaining stable - we will be able to maintain current production levels," Sayers added.

DRDGOLD was also afflicted with problems at its East Rand Proprietary Mines (ERPM), which contributed to the lowered production figures. The underground grade at ERPM was found to have dropped significantly.

Described as an "unfortunate reversal", Sayers noted that "the pattern of declining production and rising costs over a number of quarters "simply cannot be allowed to continue".

Management anticipated a reorganisation and "right-sizing" of ERPMs underground operations. The company previously stated that up to 400 employees at ERPM could be in line for retrenchment.

With regard to the company’s mining licence to mine the Top Star dump, it was still awaiting a response from the Department of Minerals and Energy.