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DRDGOLD’s third-quarter earnings rise

DRDGOLD, a tailings treatment company, reported a 17% improvement in headline earnings on higher gold production and increased revenue during the March quarter.

DRDGOLD, a tailings treatment company, reported a 17% improvement in headline earnings on higher gold production and increased revenue during the March quarter.

DRDGOLD posted headline earnings, which strip out exceptional items, of 14c for its financial third quarter. Gold revenue grew 16% to R531m, boosted by 3% higher gold output and a better rand gold price in the quarter.

The company said its gold production was "marginally better" than the average quarterly production over the past two years as its new pipeline connecting the Crown tailings and the Ergo treatment plant settles down.

"Improved throughput reflects the positive impact of both continued stabilisation in the operating parameters of the new Crown/Ergo pipeline and de-commissioning of the Crown plant," the company said.

DRDGOLD is commissioning a fine-grind and new flotation circuit at its Ergo plant, bringing to an end a capital expenditure period.

Capital expenditure was 60% higher during the quarter, reaching R99.8m, largely as a results of building the circuit.

"As our strategic capital commitments come to an end, we remain focused on maximising the operating and financial capabilities of the Brakpan plant’s CIL (carbon in leach) circuit. A key element here is improved productivity, both at operational and individual employee level," the company said.

DRDGOLD generated 35,976oz in the quarter and the company recorded a 16% rise in free cash flow to nearly R86m.

For the first nine months of the financial year, gold production was 7% higher year on year at 110,822oz. Combined with an improved rand gold price of R466,506/kg, DRDGOLD had revenue of R1.64bn and a 51% increase in headline earnings per share to 59c.

DRDGOLD is selling its ERPM mine in South Africa, an old underground mine that no longer fits its strategy, and exploration assets in Zimbabwe.

"Various expressions of interest have been received and these are being assessed, our objective being to secure the best deals that maximise value for shareholders," DRDGOLD CEO Niël Pretorius said.