Media releases

82% increase in operating profit; 150% increase in HEPS

Details

Published: Thursday, 27 October 2011 02:00

Gold production steady, “healthy” Rand gold price received

Johannesburg, South Africa. 27 October 2011. DRDGOLD Limited (DRDGOLD; JSE: DRD, NASDAQ: DROOY) today announced an increase of 82% in operating profit to R202.5 million and of 150% in headline earnings per share (HEPS) to 20 South African cents for the quarter ended 30 September 2011 compared with the previous quarter.

This resulted from a slight increase in Group gold production, more gold sold, and a “healthy” average Rand gold price received.

Total gold production for the quarter was 1% higher at 63 562oz and gold sold 7% higher at 65 523oz. The average Rand gold price received was 19% up at R395 568/kg, resulting in a 28% increase in revenue to R806.2 million. The Group managed to limit costs to R588.8 million, a 7% increase, despite the 60% winter electricity surcharge levied by power utility Eskom, and after providing for wage increases.

For the first time, for the quarter under review and going forward, the operating and financial results of DRDGOLD’s two primary surface retreatment circuits, Ergo and Crown, are consolidated. Gold production from these circuits was 34 562oz compared to 35 364 oz in the previous quarter. This was due to lower throughput in the Crown plant, which was associated with the commissioning of two new reclamation sites, after the depletion of the Top Star dump. The impact of lower throughput was partially offset by an improvement in yield, from 0.20g/t to 0.21 g/t.

Blyvooruitzicht (Blyvoor), recorded a 5% increase in total gold production to 29 000oz. Underground gold production was 10% higher at 21 509oz, reflecting a 9% improvement in underground yield to 3.64g/t. This resulted mainly from a return to the use of optimal explosives, compromised in the previous quarter by an explosion at the premises of the explosives supplier.

DRDGOLD CEO Niël Pretorius says that, in response to the company’s previously-announced intention to dispose of its 74% interest in Blyvoor, four separate offers have been received. The DRDGOLD Board of Directors is considering these and expects to announce its decision during December 2011.

Pretorius says that by December 2011 it is hoped to have the integrated Crown and Ergo circuits fully operational.

“We will then work towards fully optimising recoveries at the Brakpan plant, and take a more focused look at by-product feasibility. We are excited about these opportunities and the robust cash flows our recycling circuits offer.”

In addition to its current gold exploration activities in Zimbabwe, DRDGOLD has made exploratory visits to Mozambique. “We plan to take our exploration activities in the region up a notch in the next few months,” says Pretorius.

DRDGOLD has made a high-level appointment to drive its growth and business improvement initiatives and the previously-announced unlocking of value at ERPM Extensions 1 and 2. Pretorius confirms that an announcement regarding the appointee will be made shortly.

Queries:

South Africa & North America

Russell & Associates
Marion Brower
+27 11 880 3924 (office)
+27 82 892 8052 (mobile)

Leigh King,
+27 11 880 3924 (office)
+27 83 418 8973 (mobile)

United Kingdom/Europe

St James’s Corporate Services
Investor and Media Relations
Phil Dexter
+44 20 7499 3916 (office)
+44 779 863 4398 (mobile)

Disclaimer

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 included in this document, 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 2010, which we filed with the United States Securities and Exchange Commission on 29 October 2010 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.