| Fri 31 Aug 2007, 8:00 | | DRD - DRDGOLD - Provisional condensed annual finan |
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DRD
DRDD
DRD - DRDGOLD - Provisional condensed annual financial statements,
report to shareholders for the quarter ended 30 June 2007 and
further cautionary
DRDGOLD LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1895/000926/06)
ARBN: 086 277 616
JSE trading symbol: DRD
ISIN: ZAE000058723
Issuer code: DUSM
Nasdaq trading symbol: DROOY
("DRDGOLD" or "the company")
PROVISIONAL CONDENSED ANNUAL FINANCIAL STATEMENTS, REPORT TO SHAREHOLDERS FOR
THE QUARTER ENDED 30 JUNE 2007 AND FURTHER CAUTIONARY
GROUP RESULTS
KEY FEATURES
* Disposal by Emperor of its indirect 20% interest in the Porgera JV
completed 17 August
* DRDGOLD SA gold production increases by 7% for the quarter
* DRDGOLD SA attributable resource increases by 33% to 53.9 million ounces
* DRDGOLD SA posts a net profit of R55 million for the year
* Formation of an East Rand gold tailings treatment JV with Mintails SA
REVIEW OF OPERATIONS
GROUP Quarter Quarter % Quarter
Jun 07 Mar 07 Change Jun 06
Attributable gold production*
Australasian operations oz 10 562 28 008 (62) 39 623
kg 329 871 (62) 1 232
Discontinued operation oz - 429 (100) 2 053
kg - 13 (100) 64
South African operations oz 80 505 75 330 7 90 181
kg 2 504 2 343 7 2 805
Group oz 91 067 103 767 (12) 131 857
kg 2 833 3 227 (12) 4 101
Cash operating costs
Australasian operations US$/oz 906 707 (28) 357
ZAR/kg 206 775 164 963 (25) 74 314
Discontinued operation US$/oz - - - 515
ZAR/kg - - - 112 281
South African operations US$/oz 587 572 (3) 507
ZAR/kg 134 456 133 492 (1) 105 117
Group US$/oz 624 606 (3) 463
ZAR/kg 144 176 141 449 (2) 95 975
Gold price received US$/oz 681 663 3 618
ZAR/kg 155 198 154 629 - 127 902
Capital expenditure US$ million 8.3 9.0 8 14.8
ZAR million 58.6 65.9 11 95.2
12 months to 12 months to
30 Jun 07 30 Jun 06
Attributable gold production*
Australasian operations oz 115 751 183 028
kg 3 599 5 694
Discontinued operation oz 26 910 28 397
kg 836 884
South African operations oz 334 496 315 976
kg 10 404 9 828
Group oz 477 157 527 401
kg 14 839 16 406
Cash operating costs
Australasian operations US$/oz 610 365
ZAR/kg 141 911 75 435
Discontinued operation US$/oz 795 515
ZAR/kg 189 986 112 281
South African operations US$/oz 540 480
ZAR/kg 125 217 99 301
Group US$/oz 571 435
ZAR/kg 132 915 89 904
Gold price received US$/oz 643 531
ZAR/kg 149 133 109 721
Capital expenditure US$ million 43.0 39.1
ZAR million 310.6 251.2
* Emperor Mines Limited ("Emperor") consolidated from 6 April 2006 (previously
39.52% attributable) and Crown Gold Recoveries (Pty) Limited ("Crown"), which
included East Rand Proprietary Mines Limited ("ERPM"), consolidated 100% from 1
December 2005 (previously 40% attributable).
STOCK
ISSUED CAPITAL
370 341 981 ordinary no par value shares
5 000 000 cumulative preference shares
Total ordinary no par value shares issued and committed: 386 596 755
STOCK TRADED JSE NASDAQ
Avg. volume for the quarter per day (000) 934 3 220
% of issued stock traded (annualised) 66 227
Price - High R6.67 US$0.94
- Low R4.45 US$0.65
- Close R5.25 US$0.73
FORWARD LOOKING STATEMENTS
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 that DRDGOLD serves, a drop in the gold price, a continuing
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 limitations, those described in the section
entitled "Risk Factors" included in the annual report for the fiscal year ended
30 June 2006, which was filed with the United States Securities and Exchange
Commission on 22 December 2006 on Form 20-F. Shareholders should not place
undue reliance on these forward-looking statements, which speak only as of the
date thereof. DRDGOLD does 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 on the occurrence of unanticipated events.
OVERVIEW
Dear shareholder
Safety
With sadness I report the death of two DRDGOLD South African Operations
("DRDGOLD SA") employees. Siyakudumisa Qwetsha, a winch driver at ERPM, died in
a work-related incident and Mojalefa Semano was fatally injured when a fall of
ground occurred at Blyvoor during the quarter under review. Six DRDGOLD SA
employees died in work-related incidents during the 2007 financial year compared
with five in 2006. This left the company`s Fatal Frequency Rate in 2007
virtually unchanged at 0.21, an unacceptable performance given our drive to
achieve zero fatalities. While DRDGOLD SA`s Disabling Injury Frequency Rate for
the year declined marginally from 10.81 to 10.46, its Reportable Injury
Frequency Rate ("RIFR") rose from 3.81 to 4.75. At an operational level,
Blyvoor is worthy of singling out in terms of safety performance during 2007.
The mine has received the Minister of Minerals and Energy`s Safety Flag award
for mines in the ultra-deep gold and platinum category and won the West Rand
Mine Managers` Association Inter-mine Safety Competition for the ninth
consecutive year with a RIFR of 3.87. A range of initiatives are in place to
improve safety performance at all of DRDGOLD SA`s operations and I hope to have
more positive news to report on a quarterly basis during the 2008 financial
year.
Specific safety reforms at Tolukuma continued during the quarter, with priority
given to ensuring safer operating conditions and encouraging safer behaviour by
individual employees. In respect of operating conditions, particular attention
was given to addressing inadequate and/or high-risk physical conditions by
making improvements to ventilation (ventilation capacity increased by 300%
during the year) and electrical infrastructure. Management have also introduced
improvements to hazard and incident identification and reporting protocols,
through the introduction of a formal hazard alert program, and the
implementation of an Incident Investigation system. Both of these initiatives
include mechanisms to track actions and outcomes arising from the
identification of hazards or other safety risks.
Production
Group gold production for the quarter was 12% lower at 91 067 oz, reflecting a
62% drop in Australasian gold production to 10 562 oz - a result of the disposal
of both the Vatukoula mine in Fiji and the 20% stake in the Porgera Joint
Venture ("JV") in Papua New Guinea ("PNG"). Most encouragingly, however, the
South African operations increased gold production by 7% to 80 505 oz, a
consequence both of a return to planned underground production levels at Blyvoor
and improved surface production at ERPM.
Group gold production for the year was 10% lower at 477 157 oz due to a 33%
decline in Australasian gold production resulting both from previously reported
operating difficulties at the Australasian operations and the subsequent
disposal of Vatukoula and the Porgera JV stake. South African gold production
increased by 6%, reflecting progress in our strategy to stablise operating
performance generally.
Reserves and Resources as at 30 June 2007
DRDGOLD`s attributable Mineral Resource increased by 14% to 54.2 million ounces
and its Ore Reserve decreased by 29% to 6.3 million ounces.
DRDGOLD`s attributable Mineral Resource from its South African operations
increased by 33% to 53.9 million ounces, of which 6.2 million ounces resulted
from the granting of the ERPM Extension 2 prospecting right and 12.4 million
ounces related to ERPM`s Southern Lease area.
Despite an 11% lower stake in DRDGOLD SA, DRDGOLD`s attributable Ore Reserve
from its South African operations decreased by only 0.480 million ounces to 6.2
million ounces.
DRDGOLD`s attributable Mineral Resource from its Australasian operations
decreased by 95%, from 7.0 million ounces to 0.322 million ounces. This
decrease was primarily as a result of the disposals of Porgera and the
Vatukoula mine.
DRDGOLD`s attributable Ore Reserve from its Australasian operations also
decreased by 95%, from 2.151 million ounces to 0.108 million ounces, as a result
of the disposal of Porgera and the Vatukoula mine.
Financial
Group revenue from continuing operations for the quarter was 13% lower at R449.6
million. While revenue from the South African operations increased by 7% to
R381.8 million, revenue from the Australasian operations declined by 56% to
R69.5 million. After accounting for Group cash operating costs, which were 11%
lower at R404.7 million, Group cash operating profit was 23% lower at R44.9
million. While the South African operations recorded a 4% increase in cash
operating profit to R45.1 million, the Australasian operations incurred a loss
of R2.4 million compared with the previous quarter`s profit of R15.1 million,
mainly as the result of the sale of the stake in the Porgera JV.
Group revenue from continuing operations for the year was 32% higher at R2 087.7
million but after deducting cash operating costs, which was 41% higher at R1
813.5 million, Group cash operating profit from continuing operations was 8%
lower at R274.2 million.
DRDGOLD SA recorded a net profit of R55 million for the year compared to the
previous year`s net loss of R30 million, while Emperor`s net loss for the year
was R1 344 million after accounting for the net loss of R1 022 million from the
discontinued Vatukoula mine.
Corporate developments
The quarter and the year under review, together with the period immediately
after year-end, have all been eventful. At the time of writing, the balance
sheet restructuring of Emperor, in which DRDGOLD indirectly holds a 78.72%
interest, had been substantially completed. Key elements of this were the afore-
mentioned disposal of Vatukoula and the Porgera JV stake.
In South Africa, two exciting joint ventures with Mintails SA (Pty) Limited
("Mintails SA") were announced - one relating to underground exploration for
gold and uranium on the West Rand and the other to surface retreatment for the
recovery of gold on the East Rand, the focus being incorporation of key elements
of the Ergo surface retreatment operation, previously owned by AngloGold Ashanti
Limited.
Looking ahead
Notwithstanding various setbacks previously reported, the South African
operations are starting to show signs of responsiveness to the stablisation
strategy being applied. Continuing progress on this front - together with
positive development in respect of both brownfields reserve and resource growth
and the JVs with Mintails SA - hold promise of a sound platform for further
growth in South Africa. A consequence of the Australasian restructuring will be
the repatriation to South Africa of significant funds in the form of a capital
distribution and loan repayments from the Porgera JV disposal proceeds. This -
together with no prospect of further lending to Emperor - will greatly
strengthen the DRDGOLD balance sheet going forward, providing impetus for the
afore-mentioned anticipated growth in South Africa.
John Sayers
Chief Executive Officer
NOTE REGARDING FINANCIAL INFORMATION
KPMG`s unmodified review report on the condensed annual consolidated financial
statements, prepared in accordance with International Financial Reporting
Standards ("IFRS") and contained in this announcement, is available for
inspection at the company`s registered office.
CONSOLIDATED Quarter Quarter Quarter
(Unreviewed) Jun 07 Mar 07 Jun 06
Income Statement Rm Rm Rm
Continuing operations
Gold and silver revenue 449.6 514.9 509.7
Cash operating costs (404.7) (456.4) (386.4)
Cash operating profit 44.9 58.5 123.3
Corporate administration
and other expenses (36.8) (45.0) (16.8)
Share-based payments (9.8) (2.0) (6.5)
Exploration costs (3.6) (4.9) (5.9)
Care and maintenance costs (2.5) (3.2) (1.2)
(Loss)/profit from operations (7.8) 3.4 92.9
Retrenchment costs (4.1) (0.8) -
Investments income 7.1 19.5 (45.7)
Finance expense (22.8) (13.2) (9.6)
Net operating (loss)/profit (27.6) 8.9 37.6
Rehabilitation (10.7) (3.1) (23.7)
Depreciation (10.5) (37.0) (22.1)
(Loss)/profit on financial instruments (14.0) 1.3 22.9
Movement in gold process 1.3 (15.8) (9.1)
Loss before taxation (61.5) (45.7) 5.6
Taxation (11.0) (0.2) (16.2)
Deferred taxation 6.7 1.7 (11.6)
Loss after taxation (65.8) (44.2) (22.2)
Profit/(loss) on sale of
assets/investment 0.1 90.6 92.0
Impairments (86.4) - 68.1
Discontinued operation
Profit/(loss) for the period from
Discontinued operation 10.6 (44.0) (2.9)
Impairment from discontinued operation (20.1) (3.9) -
Net (loss)/profit for the period (161.6) (1.5) 135.0
Attributable to:
Minority interest (35.6) 3.5 (0.1)
Ordinary shareholders of the company (126.0) (5.0) 135.1
(161.6) (1.5) 135.0
Headline loss per share-cents
from continuing operations (12.5) (11.1) (8.7)
from total operations (10.2) (21.2) (7.8)
Basic (loss)/profit per share-cents
from continuing operations (32.0) (11.1) 41.4
from total operations (34.2) (1.4) 42.3
Calculated on the weighted average
ordinary shares issued of: 368 254 618 345 510 540 319 411 281
Diluted headline loss per share-cents (10.2) (21.2) (7.8)
Diluted basic (loss)/profit
per share-cents (34.2) (1.4) 42.3
(Reviewed) 12 months to 12 months to
30 Jun 07 30 Jun 06
Notes Rm Rm
Continuing operations
Gold and silver revenue 2 087.7 1 583.4
Cash operating costs (1 813.5) (1 285.0)
Cash operating profit 274.2 298.4
Corporate administration and other expenses (197.8) (129.8)
Share-based payments (12.7) (13.3)
Exploration costs (15.6) (16.5)
Care and maintenance costs (10.6) (9.2)
Profit from operations 37.5 129.6
Retrenchment costs (4.9) (1.0)
Investments income 31.9 (49.9)
Finance expense (75.4) (42.6)
Net operating profit (10.9) 36.1
Rehabilitation (20.0) (39.0)
Depreciation (133.5) (143.4)
(Loss)/profit on financial instruments (23.3) 8.4
Movement in gold process 38.6 (3.8)
Loss before taxation (149.1) (141.7)
Taxation (5.5) (15.8)
Deferred taxation (0.2) (10.2)
Loss after taxation (154.8) (167.7)
Profit on sale of assets and investments 2 82.9 96.0
Impairments 3 (70.8) 118.5
Loss from associates - (152.0)
Discontinued operation
Loss for the period from discontinued operation (215.2) (9.3)
Impairment from discontinued operation (807.1) -
Net loss for the period (1 165.0) (114.5)
Attributable to:
Minority interest (240.5) (4.4)
Ordinary shareholders of the company (924.5) (110.1)
(1 165.0) (114.5)
Headline loss per share-cents
from continuing operations (37.0) (103.4)
from total operations (86.7) (104.5)
Basic loss per share-cents
from continuing operations (55.8) (34.3)
from total operations (271.2) (35.5)
Calculated on the weighted average
ordinary shares issued of: 340 928 374 310 565 826
Diluted headline loss per share-cents (86.7) (104.5)
Diluted basic loss per share-cents (271.2) (35.5)
SEGMENTAL INFORMATION FOR THE QUARTER ENDED JUNE 2007 (Unreviewed)
South Africa Australasia Discontinued Other
Rm Rm Rm Rm
Gold and silver revenue 381.8 69.5 - (1.7)
Cash operating costs (336.7) (71.9) - 3.9
Cash operating profit 45.1 (2.4) - 2.2
Corporate administration and
other expenses (14.0) (16.3) 3.6 (6.5)
Share based payments - (8.1) - (1.7)
Exploration costs - (3.6) - -
Care and maintenance costs - - - (2.5)
Profit/(loss) from operations 31.1 (30.4) 3.6 (8.5)
Retrenchment costs - (4.1) (3.2) -
Investment income 3.0 2.5 8.4 1.6
Finance expense 3.8 (34.8) (2.4) 8.2
Net operating profit/(loss) 37.9 (66.8) 6.4 1.3
Rehabilitation (9.1) - 0.4 (1.6)
Depreciation (14.1) 0.3 (0.6) 3.3
(Loss)/profit on financial
instruments (9.2) (5.5) 2.7 0.7
Movement in gold process 2.5 (1.2) (0.3) -
Profit/(loss) before taxation 8.0 (73.2) 8.6 3.7
Taxation (0.2) (10.8) 2.0 -
Deferred taxation - 6.7 - -
Profit/(loss) after taxation 7.8 (77.3) 10.6 3.7
SEGMENTAL INFORMATION FOR THE QUARTER ENDED MARCH 2007 (Unreviewed)
South Africa Australasia Discontinued Other
Rm Rm Rm Rm
Gold and silver revenue 356.2 158.7 7.1 -
Cash operating costs (312.8) (143.6) - -
Cash operating profit/(loss) 43.4 15.1 7.1 -
Corporate administration and
other expenses (8.2) (23.6) (21.2) (13.2)
Share based payments - - - (2.0)
Exploration costs - (4.9) - -
Care and maintenance costs - - - (3.2)
Profit/(loss) from operations 35.2 (13.4) (14.1) (18.4)
Retrenchment costs - - 6.9 (0.8)
Investment income 3.2 14.6 (6.7) 1.7
Finance expense (2.2) (10.4) (1.6) (0.5)
Net operating profit/(loss) 36.2 (9.2) (15.5) (18.0)
Rehabilitation (2.3) - - (0.8)
Depreciation (22.5) (18.3) (0.3) 3.9
(Loss)/profit on financial
instruments - 1.4 (22.3) (0.1)
Movement in gold process (1.0) (14.8) (5.9) -
Profit/(loss) before taxation 10.4 (40.9) (44.0) (15.0)
Taxation (0.2) - (0.1) -
Deferred taxation - 1.7 - -
Profit/(loss) after taxation 10.2 (39.2) (44.1) (15.0)
CONDENSED CONSOLIDATED As at As at As at
Balance Sheet 30 Jun 07 31 Mar 07 30 Jun 06
(Reviewed) Notes Rm Rm Rm
Assets
Property, plant and equipment 649.8 704.6 1 850.6
Investments 59.7 62.0 38.9
Environmental trust funds 75.8 71.1 60.4
Other non-current assets - - 219.3
Current assets 1 161.9 1 170.4 835.6
Inventories 108.7 99.6 208.7
Accounts receivables 65.0 66.5 102.1
Financial assets 4 6.0 10.7 20.8
Cash and cash equivalents 135.3 108.3 489.0
Assets classified as held
for sale 8 846.9 885.3 15.0
1 947.2 2 008.1 3 004.8
Equity and Liabilities
Equity 143.5 239.8 1 015.3
Shareholders equity 141.2 204.9 782.2
Minority shareholders interest 2.3 34.9 233.1
Long-term borrowings 5 49.1 130.2 403.0
Post retirement and other employee
benefits 26.0 21.6 24.4
Provision for environmental
rehabilitation 282.6 276.0 322.3
Deferred mining and income taxes 104.3 101.6 92.0
Current liabilities 1 341.7 1 238.9 1 147.8
Accounts payable and accrued
liabilities 422.2 346.2 407.5
Financial liabilities 6 - 240.9 183.4
Current portion of
long-term borrowings 5 790.3 530.6 556.9
Liabilities classified as held
for sale 8 129.2 121.2 -
1 947.2 2 008.1 3 004.8
CONDENSED CONSOLIDATED Quarter Quarter Quarter
Statement of changes in equity Jun 07 Mar 07 Jun 06
(Unreviewed) Rm Rm Rm
Balance at the beginning of the period 239.8 109.5 612.2
Share capital issued 54.7 142.5 35.5
for acquisition finance and cash 44.9 141.4 27.9
for share options exercised - - 2.4
for increase in share-based
payment reserve 9.8 2.0 6.5
for costs - (0.9) (1.3)
Net loss attributed to
ordinary shareholders (126.0) (5.0) 135.1
Net loss attributed to
minority shareholders (35.6) 3.5 (0.1)
Increase in minorities - - 218.6
Currency translation adjustments
and other 10.6 (10.7) 14.0
Balance as at the end of the period 143.5 239.8 1 015.3
Statement of changes in equity 12 months to 12 months to
(Reviewed) 30 Jun 07 30 Jun 06
Rm Rm
Balance at the beginning of the period 1 015.3 483.1
Share capital issued 320.4 209.8
for acquisition finance and cash 314.5 199.9
for share options exercised 1.0 3.5
for increase in share-based payment reserve 12.7 13.3
for costs (7.8) (6.9)
Net loss attributed to ordinary shareholders (924.5) (110.1)
Net loss attributed to minority shareholders (240.5) (4.4)
Increase in minorities 18.5 231.7
Currency translation adjustments and other (45.7) 205.2
Balance as at the end of the period 143.5 1 015.3
Reconciliation of headline loss Quarter Quarter Quarter
(Unreviewed) Jun 07 Mar 07 Jun 06
Rm Rm Rm
Net (loss)/profit (126.0) (5.0) 135.1
Adjusted for:
Impairments 86.4 - (68.1)
Impairment from discontinued
0peration 20.2 3.9 -
Minority share of impairment (13.8) - -
Minority share of impairment from
discontinued operations (4.3) (0.8) -
Minority share of (profit)/loss) on
sale of Vatukoula (0.1) 19.3 -
Profit on sale of assets (0.1) (90.6) (92.0)
Headline loss (37.7) (73.2) (25.0)
Reconciliation of headline loss 12 months to 12 months to
(Reviewed) 30 Jun 07 30 Jun 06
Rm Rm
Net loss (924.5) (110.1)
Adjusted for:
Impairments 70.8 (118.5)
Impairment from discontinued operation 807.2 -
Minority share of impairment (13.8) -
Minority share of impairment from
discontinued operations (171.7) -
Minority share of loss on sale of Vatukoula 19.2 -
Profit on sale of assets (82.9) (96.0)
Headline loss (295.7) (324.6)
CONDENSED CONSOLIDATED Quarter Quarter Quarter
Cash Flow Statement Jun 07 Mar 07 Jun 06
(Unreviewed) Rm Rm Rm
Net cash (out)/inflow from operations (36.1) (15.8) 19.0
Working capital changes 173.2 (64.5) (89.7)
Net cash outflow from investing
activities (61.0) (73.2) (95.2)
Net cash (out)/inflow from
financing activities (3.7) 113.5 512.5
Increase/(decrease) in cash and cash
equivalents 72.4 (40.0) 346.6
Translation adjustment (61.2) (2.2) 9.4
Opening cash and cash equivalents 126.5 168.7 133.0
Closing cash and cash equivalents 137.7 126.5 489.0
Cash classified as assets held for
Sale included in the closing balance 2.4 18.2 -
Reconciliation of net cash (out)/inflow
from operations
Net operating (loss)/profit (27.6) 8.9 37.6
Net operating profit/(loss) from
Discontinued operation 6.4 (15.5) (30.7)
(21.2) (6.6) 6.9
Adjusted for:
Interest provision on convertible bond - - 7.3
Amortisation of convertible cost 0.8 - 4.3
Financial instruments 2.8 21.0 46.9
Unrealised foreign exchange gain (6.1) (7.9) (15.3)
Growth in Environmental Trust funds (2.8) (2.2) (1.5)
Other non cash items 3.3 1.3 6.5
Interest paid 0.5 (20.2) (14.4)
Taxation paid (13.4) (1.2) (21.7)
Net cash outflow from operations (36.1) (15.8) 19.0
CONDENSED CONSOLIDATED 12 months to 12 months to
Cash Flow Statement 30 Jun 07 30 Jun 06
(Reviewed) Rm Rm
Net cash outflow from operations (147.6) (13.2)
Working capital changes 237.1 (136.6)
Net cash outflow from investing activities (312.1) (232.7)
Net cash (out)/inflow from financing activities (55.2) 538.7
(Decrease)/increase in cash and cash equivalents (277.8) 156.2
Translation adjustment (73.5) 91.6
Opening cash and cash equivalents 489.0 241.2
Closing cash and cash equivalents 137.7 489.0
Cash classified as assets held for sale included
in the closing balance 2.4 -
Reconciliation of net cash (out)/inflow from operations
Net operating (loss)/profit (10.9) 36.1
Net operating loss from discontinued operation (111.5) (30.7)
(122.4) 5.4
Adjusted for:
Interest provision on convertible bond - 28.5
Amortisation of convertible cost 4.3 9.9
Financial instruments 51.7 (3.7)
Unrealised foreign exchange gain (7.4) 19.6
Growth in Environmental Trust funds (8.1) (5.6)
Other non cash items 44.8 13.3
Interest paid (76.2) (50.7)
Taxation paid (34.3) (29.9)
Net cash outflow from operations (147.6) (13.2)
NOTES REGARDING FINANCIAL INFORMATION
Note 1 - Summary of significant accounting policies
Basis of preparation
These provisional condensed annual financial statements for the year ended 30
June 2007 have been prepared in accordance with IFRS.
The principal accounting policies adopted in the preparation of the condensed
annual financial statements have been consistently applied to all years
presented, unless otherwise stated.
Note 2 - Profit on sale of investments 2007 2006
Rm Rm
Profit on sale of investments 82.9 6.5
Profit on reduction of interest in Emperor
from 88.3% to 78.9% - 89.5
82.9 96.0
Note 3 - Impairments
Loans (6.0) (23.6)
Impairment of assets and investments (64.8) -
Reversal of impairment of investment in Emperor - 74.4
Reversal of impairment on investments - 67.7
(70.8) 118.5
Note 4 - Derivative instruments
Gold call options at fair value 6.0 20.8
The current asset represents the positive
mark-to-market on gold call options.
Note 5 - Long-term liabilities
ANZ Banking Group Limited - Emperor loan * 759.0 407.2
Industrial Development Corporation of South Africa
Limited * 1.4 19.4
Investec Bank (Mauritius) Limited * 27.8 -
Convertible loan notes - 490.1
Lease and other 51.2 43.2
839.4 959.9
Less payable within one year shown
Under current liabilities (790.3) (556.9)
49.1 403.0
* These long-term liabilities have subsequently been repaid.
Note 6 - Financial liability
Gold forward contracts - 183.4
Note 7 - Contingencies
The Internal Revenue Commission ("IRC") of PNG has issued tax assessments to
Tolukuma Gold Mines Limited ("TGM") for the years 1996 to 2004 in which they
have reduced the amount of allowable capital expenditure claimed in respect of
these years with a resulting increase in potential tax payable of R16.5 million
(PGK6.8 million). TGM has lodged an objection with the IRC in relation to this
matter on the grounds that the TGM mine life based on reserves and annual
production was in accordance with claims in the tax return. The IRC have allowed
the company to defer payment of the assessment until such time as the matter is
resolved. No provisions have been recorded in respect of this item in the
financial statements as presented in the June 2007 provisional condensed
financial statements.
On 13 March 2007, the PNG press published claims by a Dr Kotapu that he had
undertaken a study amongst the downstream communities that proved Tolukuma
tailings discharge is polluting the river and poisoning local communities. Dr
Kotapu claimed that the work had been undertaken under the auspices of two
Australian Health Authorities. Subsequently, it has been confirmed that no
Government departments or health authorities, either in PNG or Australia, were
involved with Dr Kotapu`s alleged work and to date no report has been published
by Dr Kotapu.
TGM continues to work with local and international stakeholders on environmental
practices and to communicate with key regulatory and law enforcement bodies
about Dr Kotapu and his claims.
Note 8 - Subsequent events
The sale of Emperor`s 20% interest in the Porgera JV to Barrick Gold Corporation
was approved by DRDGOLD shareholders and Emperor shareholders at the
Extraordinary General Meetings held on 27 July and 30 July 2007 respectively,
including the approval by Emperor shareholders of a A$0.05 cents per share
capital distribution by Emperor.
The transaction was completed on 17 August 2007 and subsequently all Emperor
debt repaid on 20 August 2007, including the amount of US$25.8 million paid to
DRDGOLD on inter company loans.
PROFORMA CONDENSED CONSOLIDATED BALANCE SHEET
Unaudited proforma consolidated balance sheet as at 30 June 2007 showing the
effects of the disposal by Emperor of its indirect 20% interest in the Porgera
JV, the repayment of debt and capital distribution to the Emperor shareholders.
Balance Sheet As at
30 Jun 07
Rm
Assets
Property, plant and equipment 649.8
Investments 59.7
Environmental trust funds 75.8
Current assets 1 141.9
Inventories 108.7
Accounts receivables 65.0
Financial assets 6.0
Cash and cash equivalents 947.2
Assets classified as held for sale 15.0
1 927.2
Equity and Liabilities
Equity 1 106.5
Shareholders equity 953.1
Minority shareholders interest 153.4
Long-term borrowings 49.1
Post retirement and other employee benefits 26.0
Provision for environmental rehabilitation 282.6
Deferred mining and income taxes 104.3
Current liabilities 358.7
Accounts payable and accrued liabilities 329.5
Current portion of long-term borrowings 29.2
1 927.2
KEY OPERATING AND FINANCIAL RESULTS (Unreviewed)
SOUTH AFRICAN OPERATIONS
Blyvoor Quarter Quarter % Quarter
Jun 07 Mar 07 Change Jun 06
Ore milled
Underground t`000 184 141 30 178
Surface t`000 932 900 4 920
Total t`000 1 116 1 041 7 1 098
Yield
Underground g/t 4.74 4.97 (5) 5.26
Surface g/t 0.34 0.38 (11) 0.33
Total g/t 1.07 1.00 6 1.13
Gold produced
Underground oz 28 036 22 538 24 30 124
kg 872 701 24 937
Surface oz 10 255 11 092 (8) 9 806
kg 319 345 (8) 305
Total oz 38 291 33 630 14 39 930
kg 1 191 1 046 14 1 242
Cash operating costs
Underground US$/oz 665 714 7 607
ZAR/kg 152 290 166 572 9 126 037
ZAR/t 722 828 13 663
Surface US$/oz 283 265 (7) 276
ZAR/kg 64 627 61 855 (4) 57 289
ZAR/t 22 24 8 19
Total US$/oz 563 566 1 526
ZAR/kg 128 810 132 033 2 109 155
ZAR/t 137 133 (3) 123
Cash operating profit/(loss)
US$ m 3.9 2.9 34 4.4
ZAR m 28.3 20.9 35 28.5
Capital expenditure (net)US$ m 2.5 2.0 (25) 2.2
ZAR m 17.7 14.8 (20) 14.3
12 months to 12 months to
30 Jun 07 30 Jun 06
Ore milled
Underground t`000 690 674
Surface t`000 3 694 3 634
Total t`000 4 384 4 308
Yield
Underground g/t 4.98 5.55
Surface g/t 0.34 0.34
Total g/t 1.07 1.15
Gold produced
Underground oz 110 471 120 178
kg 3 436 3 738
Surface oz 40 798 39 515
kg 1 269 1 229
Total oz 151 269 159 693
kg 4 705 4 967
Cash operating costs
Underground US$/oz 642 551
ZAR/kg 149 114 113 789
ZAR/t 743 631
Surface US$/oz 287 248
ZAR/kg 66 693 51 245
ZAR/t 23 17
Total US$/oz 547 476
ZAR/kg 126 884 98 314
ZAR/t 136 113
Cash operating profit US$ m 13.5 7.9
ZAR m 97.6 50.5
Capital expenditure (net)US$ m 9.5 8.8
ZAR m 68.5 56.8
Total gold production increased by 14% to 38 291 oz, reflecting a 24% rise in
underground gold production to 28 036 oz. Surface gold production was 8% lower
at 10 255 oz.
Higher gold production from underground showed a recovery from the combined
negative effects of the illegal strike action, underground fire and shaft damage
in previous quarters and a return to the higher volume/lower grade mine plan.
While the average yield was 5% lower at 4.74 g/t, throughput was 30% higher at
184 000 t.
Lower surface gold production reflected an anticipated 11% decline in average
yield as material recovery progressed through a lower-grade area of the reserve.
Volume was 4% higher at 932 000 t.
Total cash operating costs were 1% lower at US$563/oz, reflecting a 7% decline
in underground cash operating costs to US$665/oz. Surface cash operating costs
rose by 7% to US$283/oz. Cash operating profit increased by 34% to US$3.9
million, reflecting both the increase in total gold production and lower total
cash operating costs.
The Way Ahead Project ("WAP"), involving the accessing of No 2 Sub-shaft
reserves from levels 27 to 35 of No 5 Shaft, continues, with raiseboring between
levels 27 and 31 scheduled to begin during the current quarter. Some R3.6
million in capital was spent during the quarter under review on opening up,
development, equipment and materials.
Encouraging results were obtained from a drilling programme to define the
uranium ("U308") resource in Blyvoor`s slimes dam material. RSG Global (Pty)
Limited has been appointed both to audit these results in order to declare a
uranium, gold and sulphur surface resource conforming to the SAMREC code, and to
define the underground uranium resource.
Crown Quarter Quarter % Quarter
Consolidated from 1 Dec Jun 07 Mar 07 Change Jun 06
2005(Previously 40% attributable)
Ore milled t`000 2 107 2 011 5 2 070
Yield g/t 0.33 0.36 (8) 0.36
Gold produced oz 22 667 23 180 (2) 23 823
kg 705 721 (2) 741
Cash operating costs US$/oz 507 491 (3) 489
ZAR/kg 116 026 114 423 (1) 101 456
ZAR/t 39 41 5 36
Cash operating profit # US$ m 3.6 3.8 (5) 3.5
ZAR m 25.6 27.5 (7) 22.6
Capital expenditure(net)#US$ m 1.5 1.2 (25) 1.6
ZAR m 10.1 9.0 (12) 10.6
12 months to 12 months to
30 Jun 07 30 Jun 06
Ore milled t`000 8 405 6 165
Yield g/t 0.38 0.38
Gold produced oz 103 011 75 959
kg 3 204 2 362
Cash operating costs US$/oz 450 432
ZAR/kg 104 442 89 329
ZAR/t 40 35
Cash operating profit # US$ m 19.1 9.4
ZAR m 138.2 60.4
Capital expenditure(net)#US$ m 4.2 4.9
ZAR m 30.0 31.6
# Represents total operations
Gold production was 2% lower at 22 667 oz. While throughput rose by 5% to 2 107
000 t, the average yield was 8% lower at 0.33 g/t, reflecting the mining out of
high grade sand reserves.
Cash operating costs increased by 3% to US$507/oz. Cash operating profit was 5%
lower at US$3.6 million due both to lower gold production and higher costs.
During the quarter, reclamation of the 7.64 million tonne 3L2 slimes dam began.
Treatment through the Crown plant is scheduled to continue for 24 months at a
rate of 270 000 t a month, recovering an estimated 115 000 oz of gold. A
decision on the company`s application to the Department of Minerals and Energy
("DME") for a licence to mine the Top Star dump south of Johannesburg`s CBD is
awaited.
ERPM Quarter Quarter % Quarter
Consolidated from 1 Dec 2005 Jun 07 Mar 07 Change Jun 06
(Previously 40% attributable)
Ore milled
Underground t`000 68 61 11 77
Surface t`000 500 430 16 474
Total t`000 568 491 16 551
Yield
Underground g/t 5.68 6.52 (13) 8.17
Surface g/t 0.44 0.41 7 0.41
Total g/t 1.07 1.17 (9) 1.49
Gold produced
Underground oz 12 410 12 796 (3) 20 223
kg 386 398 (3) 629
Surface oz 7 137 5 724 25 6 205
kg 222 178 25 193
Total oz 19 547 18 520 6 26 428
kg 608 576 6 822
Cash operating costs
Underground US$/oz 840 711 (18) 479
ZAR/kg 192 358 165 952 (16) 99 514
ZAR/t 1 092 1 083 (1) 813
Surface US$/oz 535 629 15 537
ZAR/kg 122 599 146 725 16 111 451
ZAR/t 55 61 10 45
Total US$/oz 728 686 (6) 493
ZAR/kg 166 887 160 010 (4) 102 316
ZAR/t 179 188 5 153
Cash operating (loss)/
Profit # US$ m (1.2) (0.7) (71) 3.7
ZAR m (8.8) (5.0) (76) 23.6
Capital expenditure(net)#US$ m 2.0 1.3 (54) 0.7
ZAR m 14.5 9.5 (53) 4.8
12 months to 12 months to
30 Jun 07 30 Jun 06
Ore milled
Underground t`000 269 225
Surface t`000 1 753 1 598
Total t`000 2 022 1 823
Yield
Underground g/t 6.71 8.29
Surface g/t 0.39 0.40
Total g/t 1.23 1.37
Gold produced
Underground oz 58 063 59 999
kg 1 806 1 866
Surface oz 22 153 20 325
kg 689 633
Total oz 80 216 80 324
kg 2 495 2 499
Cash operating costs
Underground US$/oz 654 461
ZAR/kg 151 816 95 293
ZAR/t 1 019 785
Surface US$/oz 606 499
ZAR/kg 140 719 103 109
ZAR/t 55 41
Total US$/oz 641 471
ZAR/kg 148 751 97 289
ZAR/t 184 134
Cash operating profit # US$ m (0.5) 5.8
ZAR m (3.8) 37.0
Capital expenditure(net)#US$ m 5.6 2.1
ZAR m 40.6 13.7
# Represents total operation
Total gold production was 6% higher at 19 547 oz. While underground gold was 3%
lower at 12 410 oz, surface gold increased by 25% to 7 137 oz.
Underground throughput rose by 11% to 68 000 t, reflecting better productivity
levels resulting both from improved ventilation and compressed air supply to the
eastern longwall area. Faulting below 70 level continued to compromise volume
and yield however, the latter declining by 13% to 5.68 g/t. As reported
previously, this situation is expected to continue for up to 9 months while the
faulting is negotiated.
Higher surface gold production reflected both a 16% increase in throughput to
500 000 t - a result of upgrades to pumps, pipelines and other infrastructure -
and a 7% rise in yield to 0.44 g/t.
Total cash operating costs were 6% higher at US$728/oz due to an 18% increase in
underground cash operating costs to US$840/oz. Surface cash operating costs,
however, were 15% lower at US$535/oz. The total cash operating loss increased
from US$0.7 million to US$1.2 million.
The plugging project to isolate the mine`s Far East Vertical Shaft from water
rising in the Central Witwatersrand Basin is scheduled for completion in
October. A pumping upgrade to cope with water inflow from the Hercules Basin
continues. Pumping at a rate of 60 megalitres a day is scheduled to begin in
September, with the pumped water earmarked for use by the Crown retreatment
operation. The mine has re-applied to the Government for a pumping subsidy to
help offset monthly pumping costs of R1.8 million.
During the quarter, the mine reported a 150% increase in total resources,
arising primarily from the addition of 16.74 million inferred resource ounces at
an average grade of 5.54 grams per ton in ERPM`s southern lease area and 8.32
million inferred resource ounces at an average grade of 9.06 grams per ton in
the ERPM Extension 2 area (contiguous to the ERPM Extension 1 prospecting
right).
AUSTRALASIAN OPERATIONS
Tolukuma Quarter Quarter % Quarter
Jun 07 Mar 07 Change Jun 06
Ore milled t`000 49 48 2 45
Yield g/t 6.71 6.15 9 8.58
Gold produced oz 10 561 9 483 11 12 408
kg 329 295 11 386
Cash operating costs US$/oz 906 922 2 761
ZAR/kg 206 775 215 146 4 157 850
ZAR/t 1 388 1 322 (5) 1 354
Cash operating loss US$ m (2.4) (0.8) (200) (0.3)
ZAR m (17.3) (6.1) (184) (1.9)
Capital expenditure (net)US$ m 1.6 1.3 (23) 0.6
ZAR m 11.0 9.5 (16) 3.8
12 months to 12 months to
30 Jun 07 30 Jun 06
Ore milled t`000 185 193
Yield g/t 7.43 8.83
Gold produced oz 44 181 54 790
kg 1 374 1 704
Cash operating costs US$/oz 868 564
ZAR/kg 201 582 116 650
ZAR/t 1 497 1 030
Cash operating loss US$ m (7.3) (0.7)
ZAR m (52.5) (4.6)
Capital expenditure (net)US$ m 6.5 4.3
ZAR m 46.6 27.3
Total production for the quarter was 49 000 tonnes milled at a recovered grade
of 6.71 g/t, which produced 10 561 ounces of gold. This represents an 11%
increase in gold produced over the previous quarter, due largely to a 9%
increase in yield despite a strike by employees in April, which resulted in 5
days lost production.
The major impediment to production throughout the year was the inability of the
underground mine to deliver sufficient quantities of high grade ore to maintain
mill capacity. This was due to the strong safety standards implemented at the
mine with the suspension of Gulbadi, and then to the cash flow and inventory
crisis, which occurred from December to May. As a result of this, much of the
mill feed for the year was sourced from low grade surface stockpiles.
Porgera Quarter Quarter % Quarter
(20% of the Joint Venture) Jun 07 Mar 07 Change Jun 06
Ore milled t`000 - 214 (100) 305
Yield g/t - 2.69 (100) 2.77
Gold produced oz - 18 525 (100) 27 215
kg - 576 (100) 846
Cash operating costs US$/oz - 597 100 173
ZAR/kg - 139 262 100 36 200
ZAR/t - 375 100 100
Cash operating profit US$ m 2.5 2.9 (14) 11.7
ZAR m 16.2 21.2 (24) 75.5
Capital expenditure (net)US$ m 0.7 3.1 77 5.8
ZAR m 4.4 22.3 80 37.6
12 months to 12 month to
30 Jun 07 30 Jun 06
Ore milled t`000 714 1 097
Yield g/t 3.12 3.64
Gold produced oz 71 570 128 238
kg 2 225 3 990
Cash operating costs US$/oz 450 280
ZAR/kg 105 063 57 833
ZAR/t 327 210
Cash operating profit US$ m 13.2 29.2
ZAR m 93.8 188.0
Capital expenditure (net)US$ m 8.3 17.0
ZAR m 59.6 109.3
In April 2007, Emperor announced the sale of its 20% interest in the Porgera JV
to Barrick Gold Corporation. Total consideration for the transaction was US$250
million, plus an additional adjustment amount, paid in cash. The legal effective
date of the transaction was April 1, 2007.
The sale was approved by DRDGOLD shareholders and Emperor shareholders at the
general meetings held on 27 July and 30 July 2007 respectively. The transaction
was completed on 17 August 2007.
DISCONTINUED OPERATION
Vatukoula ("Old" Emperor) Quarter Quarter % Quarter
Consolidated from 6 April 2006 Jun 07 Mar 07 Change Jun 06
(Previously 39.52% attributable)
Ore milled t`000 - - - 23
Yield g/t - - - 2.78
Gold produced oz - 429 (100) 2 053
kg - 13 (100) 64
Cash operating cost US$/oz - - - 515
ZAR/kg - - - 112 281
ZAR/t - - - 312
Cash operating profit/(loss) #
US$ m - 1.0 (100) (2.4)
ZAR m - 7.1 (100) (15.6)
Capital expenditure(net)#US$ m - 0.1 (100) 3.6
ZAR m - 0.7 100 23.3
12 months to 12 months to
30 Jun 07 30 Jun 06
Ore milled t`000 117 161
Yield g/t 7.15 5.49
Gold produced oz 26 910 28 397
kg 836 884
Cash operating costs US$/oz 795 595
ZAR/kg 189 986 122 971
ZAR/t 1 358 705
Cash operating loss # US$ m (4.5) (9.7)
ZAR m (36.9) (62.3)
Capital expenditure(net)#US$ m 9.2 11.1
ZAR m 66.2 71.1
# Represents total operation
In March 2007, Emperor announced that it had signed an agreement to sell all its
Fijian assets, including the Vatukoula Mine, to Westech Gold (Pty) Limited, a
private company incorporated in Australia. Under the agreement, Emperor sold
100% of its shares in its Australian subsidiaries (Emperor Finance Limited and
Emperor Australia Limited) which in turn owned the Fijian assets. The sale was
completed on 28 March 2007.
CASH OPERATING COSTS RECONCILIATION
AUSTRALASIAN OPERATIONS (R000 unless otherwise stated)
Tolukuma Porgera Continued Discontinued
(20%)Operations Vatukoula
Total cash costs
Jun 07 Qtr 79 225 11 181 90 406 (86)
Mar 07 Qtr 80 021 96 381 176 402 20 208
12 months to Jun 07 321 938 231 889 553 827 234 326
Movement in gold in process
Jun 07 Qtr 5 784 (6 983) (1 199) (300)
Mar 07 Qtr (8 400) (6 380) (14 780) (5 863)
12 months to Jun 07 4 608 31 099 35 707 (21 380)
Less: Exploration, production
taxes, rehabilitation and other
Jun 07 Qtr 3 874 (1 201) 2 673 (1 269)
Mar 07 Qtr 749 6 710 7 459 18 446
12 months to Jun 07 14 907 14 670 29 577 17 801
Less: Retrenchment costs
Jun 07 Qtr 999 - 999 3 239
Mar 07 Qtr - - - (6 901)
12 months to Jun 07 999 - 999 22 491
Less: Corporate and general
administration costs
Jun 07 Qtr 12 107 5 399 17 506 (2 356)
Mar 07 Qtr 7 404 3 076 10 480 2 800
12 months to Jun 07 33 666 14 553 48 219 13 826
Cash operating costs
Jun 07 Qtr 68 029 - 68 029 -
Mar 07 Qtr 63 468 80 215 143 683 -
12 months to Jun 07 276 974 233 765 510 739 158 828
Gold produced (kg)
Jun 07 Qtr 329 - 329 -
Mar 07 Qtr 295 576 871 13
12 months to Jun 07 1 374 2 225 3 599 836
Cash operating costs (R/kg)
Jun 07 Qtr 206 775 - 206 775 -
Mar 07 Qtr 215 146 139 262 164 963 -
12 months to Jun 07 201 582 105 063 141 911 189 986
Cash operating costs (US$/oz)
Jun 07 Qtr 906 - 906 -
Mar 07 Qtr 922 597 707 -
12 months to Jun 07 868 450 610 795
SOUTH AFRICAN OPERATIONS (R000 unless otherwise stated)
Crown ERPM Blyvoor Total
Total cash costs
Jun 07 Qtr 87 473 105 645 158 442 351 560
Mar 07 Qtr 90 131 98 670 143 993 332 794
12 months to Jun 07 360 957 393 562 618 156 1 372 675
Movement in gold in process
Jun 07 Qtr (447) 3 982 (1 043) 2 492
Mar 07 Qtr (416) (371) (259) (1 046)
12 months to Jun 07 (589) 3 760 (296) 2 875
Less: Exploration, production
taxes, rehabilitation and other
Jun 07 Qtr (83) 2 210 1 607 3 734
Mar 07 Qtr 3 340 2 200 1 457 6 997
12 months to Jun 07 8 843 8 434 5 881 23 158
Less: Retrenchment costs
Jun 07 Qtr - 73 - 73
Mar 07 Qtr - - - -
12 months to Jun 07 - 73 - 73
Less: Corporate and general
administration costs
Jun 07 Qtr 5 311 5 877 2 379 13 567
Mar 07 Qtr 3 876 3 933 4 170 11 979
12 months to Jun 07 16 893 17 681 14 989 49 563
Cash operating costs
Jun 07 Qtr 81 798 101 467 153 413 336 678
Mar 07 Qtr 82 499 92 166 138 107 312 772
12 months to Jun 07 334 632 371 134 596 990 1 302 756
Gold produced (kg)
Jun 07 Qtr 705 608 1 191 2 504
Mar 07 Qtr 721 576 1 046 2 343
12 months to Jun 07 3 204 2 495 4 705 10 404
Cash operating costs (R/kg)
Jun 07 Qtr 116 026 166 887 128 810 134 456
Mar 07 Qtr 114 423 160 010 132 033 133 492
12 months to Jun 07 104 442 148 751 126 884 125 217
Cash operating costs (US$/oz)
Jun 07 Qtr 507 728 563 587
Mar 07 Qtr 491 686 566 572
12 months to Jun 07 450 641 547 540
EXPLORATION AND DEVELOPMENT
Australasian operations
Papua New Guinea
The company maintains over 5 000 km2 of exploration tenements in PNG. During
the quarter the focus of drilling activity was on Tolukuma Mine Extension and
near mine targets. Regional exploration was undertaken on EL`s 580, 683, 894 and
1327.
Mine Extension
Drilling the Zine structure from both surface and underground returned a range
of positive results. The most encouraging was in hole ZN093 where a bonanza
grade intersection was recorded of 1.66m@ 204.08 g/t AU and 63.2 g/t Ag. This
was followed up with a hole ZN094, which intersected the Zine structure
approximately 70m above hole ZN093, and 30m below current development drives,
and returned 1.66m @ 63.58 g/t Au and 257.3 g/t Ag.
Drilling is ongoing in the Fundoot South area located just beyond the southern
extent of current mining operations, and at the Kagam area located approximately
25km further south than Fundoot South area.
Near mine
Drilling has been undertaken at the Banana prospect located 300m west of the
Tolukuma vein near where it swings to the south east near Gulbadi vein.
Considerable work was undertaken at Saki Prospect during the quarter. Saki is
located approximately 3 km east of the Tolukuma mine and displays many features
comparable with the Tolukuma vein array. All historical data has been compiled,
additional stream sediment sampling completed and geological mapping and rock
chip sampling completed.
PNG: Regional Programme
A soil sampling program has been completed at Hoyu Prospect located
approximately 10 km east of Tolukuma in an area exhibiting extensive "high
sulphidation" style alteration. 158 soil samples on 7 traverses were collected
over an area of 15 x 5 km.
On EL894 geological mapping and rock chip sampling was undertaken to further
define the area of confluence of the Tolukuma-Sali-Ijav faults. This area is
located approximately 13 km south east of the Tolukuma mine, and 10 km south of
the Hoyu prospect. Structures consistent with the Tolukuma-Saki-Ijav faults were
confirmed on the ground and maximum rock chip assays were 0.6 g/t Au and 20 g/t
Ag.
A three week program of mapping and rock chip sampling was completed at Aikora
Prospect on EL 1327, located 60 km north east of Tolukuma. 73 samples were
collected.
Results have been received from sampling undertaken last quarter on EL 1366. Of
the 21 samples, the highest Au grade was 1.14 g/t and separately the highest Ag
grade was 69.1 g/t.
South African operations
ERPM
Drilling is in progress from 72 H/W Drive East to confirm geological faulting
and contours prior to mining. The current depth of the hole is 73.4m with the
major fault intersection expected a further 30m ahead.
Drilling on 66 level Drive West intersected a 30m wide dyke, which was 10m
earlier than expected. A footwall was intersected on the other side of the dyke,
which suggests a down throw associated with the intrusion. This hole is to be
surveyed to confirm geological interpretation. If required, a second hole will
be drilled to determine displacement.
ERPM Extension 1(Sallies)
Drilling is currently concentrated within the current mining lease area to
define and firm up on geological structures. We are waiting for a response from
the DME regarding the permission for the overstoping of the exploration
development.
ERPM Extension 2(Sallies)
A geological report has been produced, which declares an audited inferred
Resource of 28.576 million tons at 9.06 g/t (8.32 million oz).
Blyvoor
During the quarter, Blyvoor slimes dams were drilled and sampled for gold,
uranium and sulphur. An audited inferred uranium and gold slimes dam resource
will be declared during the 2007/8 financial year.
Composite samples, taken from the metallurgical plant run-of-mine, underground
feed, and slimes reclamation, returned encouraging U308 grades, which ranged
from 0.05 to 0.09 kg/ton.
An exploration drilling program linked to opening up and development has been
scheduled out. Drilling is expected to commence in September 2007 to evaluate
the south west downdip extension of the ore body, which is south of the Boulder
Dyke.
FURTHER CAUTIONARY
Further to the latest cautionary announcement dated 27 July 2007, shareholders
are advised that negotiations are still in progress relating to further
restructuring of DRDGOLD`s interests which, if successfully concluded, may have
a material effect on the price of the company`s ordinary shares. Accordingly,
shareholders are advised to continue exercising caution when dealing in the
company`s ordinary shares until a full announcement is made.
DIRECTORS - (*British)(**Australian)(***American)
Executive:
JWC Sayers (Chief Executive Officer)
Non-executives:
J Turk ***
Independent non-executives:
DJM Blackmur** (Senior Non-Executive Director); GC Campbell*(Non-Executive
Chairman); RP Hume
Alternate:
JH Dissel
Company Secretary:
TJ Gwebu
INVESTOR RELATIONS
For further information, contact John Sayers at:
Tel: (+27-11) 219-8700, Fax: (+27-11) 476-2637,
website: http://www.drdgold.com
Ebsco House 4, 299 Pendoring Avenue,
Blackheath, Randburg, South Africa.
PO Box 390,
Maraisburg, 1700,
South Africa.
Randburg
31 August 2007
Sponsor
BDO QuestCo (Pty) Limited
Date: 31/08/2007 08:00:02 Produced by the JSE SENS Department.
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