Johannesburg, South Africa. 12 February 2013. DRDGOLD Limited CEO Niël Pretorius says the company has reported “satisfactory” results for the quarter ended 31 December 2012, reflecting a “solid performance” from surface retreatment subsidiary Ergo.
Johannesburg, South Africa. 12 February 2013. DRDGOLD Limited (DRDGOLD; JSE, NYSE: DRD) CEO Niël Pretorius says the company has reported “satisfactory” results for the quarter ended 31 December 2012, reflecting a “solid performance” from surface retreatment subsidiary Ergo.
“Consequently, we are delighted to declare an interim dividend of 14 South African cents per ordinary share,” Pretorius said
A 37% increase in operating profit to R238.7 million resulted from a 9% increase in gold production to 39 031oz and a 7% increase in the average Rand gold price received to R478 309/kg. Cash operating costs were 12% lower at US$1 017/oz.
Headline earnings per share increased by 25% to 25 South African cents per share.
Talking to Ergo’s “next growth chapter” – the flotation/fine-grind circuit, currently under construction, and expected to improve extraction efficiencies by between 16 and 20% – Pretorius said this had accounted for most of the R103.5 million capital expenditure incurred in the quarter.
A further R94 million is likely to be spent on the new circuit over the next two quarters, he said, with attainment of full throughput expected on schedule by the end of FY2013, in spite of a slight delay in the arrival of the mills from Canada.
Turning to DRDGOLD’s ERPM asset, Pretorius said its Cason Shaft had been refurbished and recommissioned at a cost of R12 million, and a 6 000tpm plant constructed at a cost of R13 million.
“We expect these to make ERPM self-sustaining, in order to support the cost of additional underground exploration required to add value to the current inferred gold resource of approximately 21 million ounces. This asset is now for sale.”
Pretorius said that – in respect of four of the five prospects held by its ChizimGold Joint Venture in Zimbabwe – underground mining is indicated; and as this does not feature in DRDGOLD’s strategy, these prospects would be packaged for disposal. Prospects for gold tailings reclamation in the country are being evaluated currently.
Looking ahead, Pretorius said DRDGOLD’s priority remains delivery on its FY2013 targets. In Q3 and Q4, there will be continued focus on maintaining Ergo’s tonnage volumes and on completion of the flotation/fine-grind circuit.
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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 2012, which we filed with the United States Securities and Exchange Commission on 26 October 2012 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.