Media releases

DRDGOLD doubles cash inflow from operations; plans for further ergo expansion

Details

Published: Tuesday, 14 February 2012 02:00

Johannesburg, South Africa. 14 February 2012. DRDGOLD Limited (DRDGOLD; JSE, NYSE: DRD) has reported a 107% increase in cash inflow from operations and substantially higher net profit and headline earnings for the quarter ended 31 December 2011. Gold production was steady and costs marginally lower.

Johannesburg, South Africa. 14 February 2012. DRDGOLD Limited (DRDGOLD; JSE, NYSE: DRD) has reported a 107% increase in cash inflow from operations and substantially higher net profit and headline earnings for the quarter ended 31 December 2011. Gold production was steady and costs marginally lower.

Total gold production was 63 659oz compared with 63 562oz in the previous quarter.

After accounting for cash operating unit costs, 2% lower at R292 988/kg, cash inflow from operations was R243.9 million. Net profit, buoyed by an 11% increase in the average Rand gold price received to R437 316/kg, was 99% higher at R165.1 million. Headline earnings rose by 66% to R125.3 million.

DRDGOLD CEO Niël Pretorius says a process of "settling in" at Ergo – a consequence both of the integration of the Crown circuit with the Ergo circuit via the new, 52-kilometre Crown/Ergo pipeline and of the commissioning of new reclamation sites – has been smoother than anticipated.

"Over the next few months, we intend to fully bed down the Crown/Ergo integration, and expect to leverage the virtually unassailable competitive advantage this gives us to grow our 11Moz surface resource," Pretorius says.

Ergo flotation/fine-grind: 16-20% more gold anticipated

The DRDGOLD Board of Directors has approved the incorporation of a flotation and fine-grind milling circuit into Ergo's Brakpan plant infrastructure at a capital cost of some R250 million. This is expected to take 18 months to construct and to increase gold production by between 16 and 20%.

ERPM exploration

Pretorius says that, in respect of ERPM Extensions 1 and 2, exploration drilling budgeted at R22 million is planned to take the resource to a SAMREC- and JORC-compliant level of confidence.

"We will then decide on what is the most appropriate commercial model for this resource – possibly creating a separate investment opportunity."

South Africa & North America

James Duncan, Russell and Associates
+27 11 880 3924 (office)
+27 82 892 8052 (mobile)

United Kingdom/Europe

Investor and Media Relations
Phil Dexter, St James's Corporate Services
+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, 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.