| Thu 1 Nov 2007, 8:00 | | DRD - DRDGold - Report to shareholders for the fir |
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DRD
DRDD
DRD - DRDGold - Report to shareholders for the first quarter ended
30 September 2007 of the 2008 financial year
DRDGOLD LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1895/000926/06)
ARB number 086 277 616
JSE share code: DRD
ISIN: ZAE000058723
Issuer code: DUSM
Nasdaq trading symbol: DROOY
("DRDGOLD" or "the company")
REPORT TO SHAREHOLDERS FOR THE FIRST QUARTER ENDED 30 SEPTEMBER 2007
OF THE 2008 FINANCIAL YEAR
GROUP RESULTS (Unaudited)
KEY FEATURES
- DRDGOLD disposes of its stake in Emperor
- DRDGOLD cash resources increase to R897 million
- DRDGOLD SA gold production increases by 11% for the quarter
- DRDGOLD SA profit after taxation increases by 136% for the quarter
- Blyvoor firms up on uranium and sulphur surface resources
- Blyvoor`s surface gold resource increases by 236% to 1.69 million oz
KEY RESULTS SUMMARY
GROUP Quarter Quarter % Quarter
Sep 07 Jun 07 Change Sep 06
Attributable gold production
South Africa operations oz 89 157 80 505 11 91 339
kg 2 773 2 504 11 2 841
Discontinued operations oz 10 033 10 562 (5) 58 858
kg 311 329 (5) 1 829
Group oz 99 190 91 067 9 150 197
kg 3 084 2 833 9 4 670
Cash operating costs
South African operations US$/oz 584 587 1 503
ZAR/kg 133 673 134 456 1 115 821
Discontinued operations US$/oz 1 017 906 (12) 528
ZAR/kg 233 707 206 775 (13) 121 792
Group US$/oz 628 624 (1) 526
ZAR/kg 143 761 144 176 - 121 185
Gold price received US$/oz 693 681 2 625
ZAR/kg 158 598 155 198 2 143 963
Capital expenditure US$ million 5.1 8.3 39 14.2
ZAR million 36.5 58.6 38 101.6
STOCK
ISSUED CAPITAL
376 141 981 ordinary no par value shares
5 000 000 cumulative preference shares
Total ordinary no par value shares issued and committed: 389 374 236
STOCK TRADED JSE NASDAQ
Avg. volume for the quarter
per day (000) 1 127 2 346
% of issued stock traded
(annualised) 78 163
Price - High R6.19 US$0.876
- Low R3.50 U$S0.473
- Close R5.50 U$S0.804
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
many be expressed or implied by such forward-looking statements, including,
among others, adverse changes or uncertainties in general economic conditions in
the markets 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 to the occurrence of unanticipated events.
OVERVIEW
Dear shareholder
Safety
With deep regret I must record the death of two individuals in work-related
incidents during the quarter under review. Mr Samuel Vini, an hydraulic pick
driver employed by a contractor, died when he was struck by a silo undergoing
demolition at the metallurgical plant of East Rand Proprietary Mines Limited
("ERPM"), and Mr Paul Ngxakazela, a rock drill operator, in a rock fall
underground at ERPM. Notwithstanding, these fatalities occurred in the same
period that ERPM recorded significant improvements in both its Disabling Injury
Frequency Rate ("DIFR") - from 19.96 to 6.33 - and its Reportable Injury
Frequency Rate ("RIFR") - from 7.6 to 3.21.
DRDGOLD SA`s other operations, Blyvooruitzicht Gold Mining Company Limited
("Blyvoor") and Crown Gold Recoveries (Pty) Limited ("Crown"), while fatality-
free in the quarter under review, recorded mixed performances in respect of
disabling and reportable injuries. While Blyvoor`s RIFR improved from 3.24 to
2.97, its DIFR deteriorated slightly from 6.23 to 6.44. Crown`s RIFR improved
from 2.12 to 0.99 but its DIFR deteriorated from 4.24 to 5.99. A range of
campaigns and programmes are in place throughout the Group`s operations to
effect and maintain improvements in safety.
Increased imposition by the Department of Minerals and Energy ("DME") of Section
54 notices in terms of the Mine Health and Safety Act following fatalities in
the mining industry has drawn substantial media and public attention in recent
weeks. At Blyvoor in the current quarter two fatalities occurred - one tramming
related and the other a consequence of a rock burst - both within weeks of the
mine being awarded the Minister of Minerals and Energy`s safety award in the
deep-level, metalliferrous category, for the mine with the best safety
improvement.
In the case of both fatalities, the DME imposed Section 54 notices. In respect
of the latter, the effect was suspension of all underground operations at all
three shafts, pending the completion of an independent risk assessment, which
would inform the DME`s decision of further steps to be taken.
Efforts to engage with the DME to explain, amongst other things, the safety
consequences of a total suspension of operations for an unspecified period of
time proved fruitless and the company had no option but to seek a court order to
relieve the blanket ban.
I am anxious to remove any residual suspicion there may be that the company`s
action was prompted by a concern over lost production or simple `bloody-
mindedness`. As a Group we are firmly committed to the imperative that safety
always takes precedence over production, and we accept fully both the need for
regulation and the regulator`s role in matters of safety. It is pleasing to
report that mine management, the DME and organised labour are now working
together in a more co-operative manner that augurs well for the future.
Production
Group gold production rose by 9% to 99 190 oz, reflecting an 11% increase in
South African gold production to 89 157 oz. Gold production from the Tolukuma
mine in Papua New Guinea decreased by 5% to 10 033 oz.
Each of the South African operations - Blyvoor, Crown and ERPM - contributed
positively to DRDGOLD SA`s improvement, indicative of the continued benefits
flowing from the company`s ongoing stabilisation programme.
In this results announcement, Tolukuma is designated as a discontinued
operation, reflecting the conclusion earlier in the current quarter of DRDGOLD`s
disposal of its 78.72% interest in Emperor Mines Limited ("Emperor")(refer
Corporate developments below).
Financial
Revenue from the continuing South African operations was 13% higher at R433.0
million, reflecting improved production and a higher average gold price
received. After accounting for cash operating costs of R370.7 million (previous
quarter: R336.7 million), cash operating profit was 38% higher at R62.3 million.
Emperor narrowed its R66.8 million loss in the previous quarter to R56.6 million
in the quarter under review and after accounting for a R1.0 billion profit
(before minority interest) from Emperor`s sale of its 20% interest in the
Porgera Joint Venture in Papua New Guinea, the Group`s net profit for the
quarter under review was R964.1 million (previous quarter loss: R161.6 million).
Corporate developments
Earlier in the second quarter, DRDGOLD announced the sale of its 78.72% interest
in Emperor to institutional investors for a total consideration of A$56 million
(R340.9 million), drawing to a close the Group`s challenging - indeed, troubled
- mining investment experience in Australasia.
At the same time, the company re-stated its intention to focus solely on
opportunities in South Africa and to apply the cash received from the Emperor
disposal to:
- improving efficiencies of its existing South African mines;
- expanding its South African surface retreatment operations; and
- developing its uranium and exploration potential in the country.
Looking ahead
Continuing improvement in the performance of our existing South African
operations (covered in greater detail later in this report) points to the
success of our ongoing programme to stabilise these operations. Further, it
reinforces our decision to exit from our Australasian interests and to `come
home`, so to speak, and focus all of our resources here.
Work on our Ergo Mining Joint Venture with Mintails SA ("the ERGO JV") continues
apace, with recovery of slimes from the Elsburg Tailings Complex and retreatment
through the refurbished Brakpan plant at an initial rate of 1.25 million tons a
month expected to yield some 200 kg of gold a month when the project gets
underway. The boards of the partners in the ERGO JV have approved a capital
investment of R400 million, with excellent prospects for further growth from
gold, uranium and sulphuric acid production.
On the matter of uranium, we report elsewhere in this document on our
declaration of a 17.5 million lb uranium resource for our Blyvoor tailings dams,
coupled with a 0.8 million t sulphur resource and a 236% increase in the mine`s
surface gold resource to 1.69 million oz, and on additional exploration
programmes under way at our other operations to further define and quantify our
uranium potential. Encouraging updates are also provided on our underground
exploration activities and project developments.
With the Australasian exit now complete, I am confident we have all of the
resources - a good mix of assets above and below ground, enthusiastic executive
and management teams and a robust balance sheet - to position us well to
establish a solid home base.
John Sayers
Chief Executive Officer
NOTE REGARDING FINANCIAL INFORMATION
The condensed consolidated financial statements below are prepared in accordance
with International Financial Reporting Standards ("IFRS").
CONDENSED CONSOLIDATED Quarter Quarter Quarter
Income statement Sep 07 Jun 07 Sep 06
(Unaudited) R m R m R m
*Restated *Restated
Continuing operations
Gold and silver revenue 433.0 381.8 406.2
Cash operating costs (370.7) (336.7) (329.0)
Cash operating profit 62.3 45.1 77.2
Corporate administration and
other expenses (22.8) (20.3) (27.1)
Share-based payments 0.5 (1.6) (3.4)
Care and maintenance cost (2.5) (2.5) (2.1)
Cash profit from operations 37.5 20.7 44.6
Retrenchment costs (1.1) - -
Investments (expense)/income (2.3) 6.6 (6.9)
Finance charge (8.4) 12.0 (8.2)
Net operating profit 25.7 39.3 29.5
Rehabilitation (4.7) (10.7) (3.1)
Depreciation (19.7) (10.8) (12.2)
Loss on financial instruments - (8.6) -
Movement in gold process (0.6) 2.5 0.8
Profit before taxation 0.7 11.7 15.0
Taxation - (0.2) (0.1)
Profit after taxation 0.7 11.5 14.9
Profit on sale of assets/investment 12.0 0.1 -
Impairments - (21.5) -
Discontinued operations
Loss for the period
from discontinued operations (56.6) (66.8) (95.3)
Profit on sale of investments 1 008.0 - -
Impairment - (84.9) -
Net profit/(loss) 964.1 (161.6) (80.4)
Attributable to:
Minority interest 207.0 (35.6) (14.3)
Ordinary shareholders of the
company 757.1 (126.0) (66.1)
964.1 (161.6) (80.4)
Headline profit/(loss) per share-cents
from continuing operations 0.2 2.4 2.8
from total operations (11.7) (10.2) (20.6)
Basic profit/(loss) per share-cents
from continuing operations 3.4 (17.3) 2.8
from total operations 201.8 (34.2) (20.6)
Calculated on the weighted
average ordinary shares
issued of: 375 196 329 368 254 618 321 092 406
Diluted headline loss per
share-cents (11.7) (10.2) (20.6)
Diluted basic profit/(loss) per
share-cents 201.8 (34.2) (20.6)
*Restated to account for Emperor as a discontinued operation.
SEGMENTAL INFORMATION FOR THE SEPTEMBER 2007 QUARTER
South Africa Australasia Other
Discontinued
Rm Rm Rm
Gold and silver revenue 433.0 66.3 -
Cash operating costs (370.7) (72.7) -
Cash operating profit/(loss) 62.3 (6.4) -
Corporate administration and
other expenses (13.8) (13.5) (9.0)
Share based payments - - 0.5
Exploration costs - (7.1) -
Care and maintenance costs - - (2.5)
Cash profit/loss from operations 48.5 (27.0) (11.0)
Retrenchment costs (0.4) - (0.7)
Investment income 4.8 (24.8) (7.1)
Finance charge (6.3) (29.6) (2.1)
Net operating profit/(loss) 46.6 (81.4) (20.9)
Rehabilitation (3.6) - (1.1)
Depreciation (23.9) (6.2) 4.2
Profit on financial instruments - 0.6 -
Movement in gold process (0.7) (12.4) 0.1
Profit/(loss) before taxation 18.4 (99.4) (17.7)
Taxation - (31.8) -
Deferred taxation - 74.6 -
Profit/(loss) after taxation 18.4 (56.6) (17.7)
SEGMENTAL INFORMATION FOR THE JUNE 2007 QUARTER
South Africa Australasia Other
Discontinued
Rm Rm Rm
Gold and silver revenue 381.8 69.5 -
Cash operating costs (336.7) (71.8) -
Cash operating profit 45.1 (2.3) -
Corporate administration and
other expenses (14.0) (12.8) (6.3)
Share based payments - (8.2) (1.6)
Exploration costs - (3.6) -
Care and maintenance costs - - (2.5)
Cash profit/loss from operations 31.1 (26.9) (10.4)
Retrenchment costs - (7.3) -
Investment income 3.0 10.9 3.6
Finance charge 3.8 (37.2) 8.2
Net operating profit/(loss) 37.9 (60.5) 1.4
Rehabilitation (9.1) 0.4 (1.6)
Depreciation (14.1) (0.3) 3.3
(Loss)/profit on financial
instruments (9.2) (2.8) 0.6
Movement in gold process 2.5 (1.5) -
Profit/(loss) before taxation 8.0 (64.7) 3.7
Taxation (0.2) (8.8) -
Deferred taxation - 6.7 -
Profit/(loss) after taxation 7.8 (66.8) 3.7
CONDENSED CONSOLIDATED As at As at As at
Balance Sheets 30 Sep 07 30 Jun 07 30 Sep 06
(Unaudited) Rm Rm Rm
Employment of Capital
Net mining assets 627.0 649.8 2 016.1
Investments 59.8 59.7 39.0
Environmental trust funds 79.2 75.8 62.9
Other non-current assets - - 245.7
Current assets 1 177.0 1 161.9 928.7
Inventories 58.2 108.7 260.5
Accounts receivables 58.9 65.0 123.8
Financial assets - 6.0 12.2
Cash and cash equivalents 425.4 135.3 517.2
Assets classified as held for sale 634.5 846.9 15.0
1 943.0 1 947.2 3 292.4
Capital employed
Shareholders equity 1 251.8 143.5 1 093.3
Shareholders interest 1 073.8 141.2 850.2
Minority shareholders interest 178.0 2.3 243.1
Long-term borrowings 49.2 49.2 335.9
Post retirement and other
employee benefits 20.9 26.0 20.7
Rehabilitation 279.8 282.6 332.4
Deferred mining and income taxes - 104.3 96.2
Current liabilities 341.3 1 341.6 1 413.9
Trade and other payables 250.8 422.1 541.3
Derivative instruments - - 199.3
Current portion of long-term
borrowings - 790.3 673.3
Liabilities classified
as held for sale 90.5 129.2 -
1 943.0 1 947.2 3 292.4
CONDENSED Quarter Quarter Quarter
Statement of changes Sep 07 Jun 07 Sep 06
in equity (Unaudited) Rm Rm Rm
Balance at the beginning of
the period 143.5 239.8 1 015.3
Share capital issued 26.6 54.7 41.5
for acquisition finance and cash 28.0 44.9 40.0
for share options exercised - - 0.3
increase in share-based payment
reserve (0.5) 9.8 3.4
for costs (0.9) - (2.2)
Net profit/(loss) attributed to
ordinary shareholders 757.1 (126.0) (66.1)
Net profit/(loss) attributed to
minority shareholders 207.0 (35.6) (14.3)
Currency translation adjustments
and other 117.6 10.6 116.9
Balance as at the end of the
period 1 251.8 143.5 1 093.3
Reconciliation of headline profit/(loss)
Net profit/(loss) 757.1 (126.0) (66.1)
Adjusted for:
Impairments - 86.4 -
Impairment from
discontinued operation - 20.2 -
Minority share of impairment - (13.8) -
Minority share of impairment
from discontinued operations - (4.3) -
Profit on sale of Porgera (1 008.0) - -
Minority share of profit on
sale of investments 219.0 (0.1) -
Profit on sale of investments (12.0) (0.1) -
Headline loss (43.9) (37.7) (66.1)
CONDENSED CONSOLIDATED Quarter Quarter Quarter
Cash Flow Statement Sep 07 Jun 07 Sep 06
(Unaudited) Rm Rm Rm
Net cash out flow from operations (35.1) (36.1) (11.5)
Working capital changes (274.6) 173.2 71.2
Net cash outflow from investing
activities 1 870.4 (61.0) (105.8)
Net cash (out)/in flow from
financing activities (1 059.6) (3.7) 38.4
Increase/(Decrease) in cash
and cash equivalents 501.1 72.4 (7.7)
Translation adjustment 258.5 (61.2) 35.9
Opening cash and cash equivalents 137.7 126.5 489.0
Closing cash and cash equivalents 897.3 137.7 517.2
Cash classified as assets held
for sale included in the
closing balance 471.9 2.4 -
Reconciliation of net
cash outflow from operations
Net operating profit 25.7 39.3 29.5
Net operating loss from
discontinued operations (81.4) (60.5) (41.9)
(55.7) (21.2) (12.4)
Adjusted for:
interest provision 3.9 - 7.0
Amortisation of convertible cost - 0.8 1.7
Financial instruments (0.6) 2.8 4.2
Unrealised foreign exchange
gain/(loss) 38.1 (6.1) 16.4
Growth in Environmental Trust
funds (1.8) (2.8) (0.8)
Other non cash items 38.5 3.3 3.4
Interest paid (34.2) 0.5 (12.2)
Taxation paid (23.3) (13.4) (18.8)
Net cash outflow from operations (35.1) (36.1) (11.5)
KEY OPERATING AND FINANCIAL RESULTS (Unaudited)
SOUTH AFRICAN OPERATIONS
Blyvoor Quarter Quarter % Quarter
Sep 07 Jun 07 Change Sep 06
Ore milled
Underground t`000 194 184 5 182
Surface t`000 856 932 (8) 966
Total t`000 1 050 1 116 (6) 1 148
Yield
Underground g/t 5.03 4.74 6 5.15
Surface g/t 0.31 0.34 (9) 0.33
Total g/t 1.18 1.07 11 1.10
Gold produced
Underground oz 31 347 28 036 12 30 125
kg 975 872 12 937
Surface oz 8 488 10 255 (17) 10 352
kg 264 319 (17) 322
Total oz 39 835 38 291 4 40 477
kg 1 239 1 191 4 1 259
Cash operating costs
Underground US$/oz 667 665 - 627
ZAR/kg 152 673 152 290 - 144 491
ZAR/t 767 722 (6) 744
Surface US$/oz 406 283 (44) 293
ZAR/kg 92 992 64 627 (44) 67 565
ZAR/t 29 22 (32) 23
Total US$/oz 611 563 (9) 542
ZAR/kg 139 956 128 810 (9) 124 817
ZAR/t 165 137 (20) 137
Cash operating profit
US$ m 2.8 3.9 (28) 3.2
ZAR m 20.0 28.3 (29) 23.0
Capital expenditure (net)
US$ m 1.9 2.5 24 2.7
ZAR m 13.7 17.7 23 19.1
Total gold production rose by 4% to 39 835 oz, reflecting a 12% increase in gold
produced from underground to 31 347 oz. Gold produced from surface sources was
17% lower at 8 488 oz.
Higher underground gold production resulted from a 5% increase in throughput to
194 000 t and a 6% increase in average grade to 5.03 g/t. Lower levels of
seismicity, improved stoping layouts, cleaner mining, and better ventilation
were among the factors that contributed to the improved performance.
An 8% decline in throughput to 856 000 t and a 9% drop in average grade to 0.31
g/t resulted in lower surface gold production. Harder, poorer grade material
recovered from the No 4 slimes dam and blended with higher grade material to
offset future rehabilitation liabilities compromised performance. An upgrade of
the transfer station, commissioning of a wider diameter residue line and steps
to increase the power of the water column are expected to contribute to improved
recoveries going forward.
Total cash operating costs were 9% higher at US$611/oz. While underground cash
operating costs were virtually unchanged at US$667/oz, surface cash operating
costs rose by 44% to US$406/oz. Cash operating profit was down 29% at R20.0
million, reflecting lower surface gold production.
The Way Ahead Project to access No 2 sub-shaft reserves from levels 27 to 35 of
No 5 shaft continued on schedule during the quarter. Stoping is expected to
begin in March 2008.
Crown Quarter Quarter % Quarter
Sep 07 Jun 07 Change Sep 06
Ore milled t`000 2 147 2 107 2 2 056
Yield g/t 0.35 0.33 6 0.42
Gold produced oz 24 371 22 667 8 27 521
kg 758 705 8 856
Cash operating costs
US$/oz 515 507 (1) 423
ZAR/kg 117 825 116 026 (2) 97 453
ZAR/t 42 39 (8) 41
Cash operating profit
US$ m 4.1 3.6 14 5.5
ZAR m 29.3 25.6 14 39.1
Capital expenditure (net)
US$ m 0.2 1.5 87 1.0
ZAR m 1.5 10.1 85 7.1
Gold production was 8% higher at 24 371 oz. Throughput rose by 2% to 2 147 000 t
and average grade by 0.35 g/t, indicative of continuing benefit from recent
infrastructural upgrades.
Although cash operating costs rose by 1% to US$515/oz, a consequence mainly of
higher acid and lime prices and winter power tariffs, cash operating profit
increased by 14% to R29.3 million.
Production build-up from the new, 3L2 slimes dam continues according to plan.
ERPM Quarter Quarter % Quarter
Sep 07 Jun 07 Change Sep 06
Ore milled
Underground t`000 80 68 18 76
Surface t`000 511 500 2 435
Total t`000 591 568 4 511
Yield
Underground g/t 5.96 5.68 5 7.49
Surface g/t 0.58 0.44 32 0.36
Total g/t 1.31 1.07 23 1.42
Gold produced
Underground oz 15 336 12 410 24 18 325
kg 477 386 24 570
Surface oz 9 615 7 137 35 5 016
kg 299 222 35 156
Total oz 24 951 19 547 28 23 341
kg 776 608 28 726
Cash operating costs
Underground US$/oz 676 840 19 510
ZAR/kg 154 828 192 358 20 117 481
ZAR/t 923 1 092 15 880
Surface US$/oz 498 535 7 599
ZAR/kg 114 063 122 599 7 137 949
ZAR/t 67 55 (22) 49
Total US$/oz 608 728 17 529
ZAR/kg 139 121 166 887 17 121 879
ZAR/t 183 179 (2) 173
Cash operating profit/(loss)
US$ m 1.8 (1.2) 250 2.1
ZAR m 13.0 (8.8) 248 15.1
Capital expenditure (net)
US$ m 0.9 2.0 55 1.1
ZAR m 6.2 14.5 57 8.1
Total gold production increased by 28% to 24 951 oz, indicative of better
performance from both the underground and surface operations.
Underground throughput rose by 18% to 80 000 t and the average grade by 5% to
5.96 g/t, resulting in a 24% increase in gold production to 15 336 oz.
Infrastructural upgrades in the eastern longwall area have contributed
substantially to the improvement. Previously reported faulting is a challenge
likely to continue for some months.
Underground mining of the Main Reef and Main Reef Leader at the mine`s Cason
Shaft by an independent contractor is proceeding at a rate of between 2 000 and
3 000 tpm at a average grade of 13 g/t. The mined ore is treated through a
separate stream at the ERPM plant. Mining is expected to continue for up to
three years.
Surface gold production increased by 35% to 9 615 oz, primarily as a consequence
of a 32% improvement in the average grade to 0.58 g/t. Throughput was 2% higher
at 511 000 t.
Total cash operating costs were 17% lower at US$608/oz, reflecting a 19%
decrease in underground cash operating costs to US$676/oz and a 7% decrease in
surface cash operating costs to US$498/oz. Higher production and lower costs
resulted in a R13.0 million cash operating profit compared with an R8.8 million
loss in the previous quarter.
Pumping of 60 megalitres of water a day from the Hercules Basin via recently
upgraded pumping infrastructure is scheduled to begin shortly. The water will be
used by the Crown surface retreatment operation. Completion of the extensive
plugging project to isolate the Far East Vertical Shaft from rising water in the
Central Witwatersrand Basin has been postponed to January 2008 to fit in with
the mine`s capital expenditure programme.
Work to reduce the ERPM plant footprint is 90% complete, and is expected to
substantially reduce the mine`s rehabilitation obligation in the longer term.
AUSTRALASIAN OPERATIONS
Tolukuma Quarter Quarter % Quarter
Sep 07 Jun 07 Change Sep 06
Ore milled t`000 45 49 (8) 43
Yield g/t 6.91 6.71 3 8.77
Gold produced oz 10 033 10 561 (5) 12 141
kg 311 329 (5) 377
Cash operating costs
US$/oz 1 017 906 (12) 835
ZAR/kg 233 707 206 775 (13) 192 634
ZAR/t 1 615 1 388 (16) 1 689
Cash operating (loss)/profit
US$ m (0.9) (2.4) 63 (3.0)
ZAR m (6.5) (17.3) 62 (20.8)
Capital expenditure (net)
US$ m 2.1 1.6 (31) 2.0
ZAR m 15.0 11.0 (36) 14.3
Gold production for the quarter was 5% lower at 10 033 oz reflecting an 8%
decrease in ore milled. Production during the quarter was impacted by power
supply issues which resulted in reduced operations in the mill and underground.
DRDGOLD announced on 22 October 2007, that it had disposed of its entire
interest in Emperor.
Porgera (20% of the Quarter Quarter % Quarter
Joint Venture) Sep 07 Jun 07 Change Sep 06
Ore milled t`000 - - - 262
Yield g/t - - - 3.48
Gold produced oz - - - 29 379
kg - - - 913
Cash operating costs
US$/oz - - - 401
ZAR/kg - - - 92 539
ZAR/t - - - 322
Cash operating profit
US$ m - 2.5 (100) 4.5
ZAR m - 16.2 (100) 32.2
Capital expenditure (net)
US$ m - 0.7 100 1.8
ZAR m - 4.4 100 12.9
At a general meeting held on 27 July 2007, DRDGOLD shareholders approved the
disposal by Emperor of its 20% interest in the Porgera Joint Venture to a
subsidiary of Barrick Gold Corporation for a purchase consideration of US$250.0
million. The sale transaction was completed on 17 August 2007 for a final cash
consideration of US$255.0 million, which included interest. The legal effective
date of the transaction was 1 April 2007.
Vatukoula ("Old" Emperor) Quarter Quarter % Quarter
Sep 07 Jun 07 Change Sep 06
Ore milled t`000 - - - 80
Yield g/t - - - 6.74
Gold produced oz - - - 17 338
kg - - - 539
Cash operating cost
US$/oz - - - 642
ZAR/kg - - - 148 006
ZAR/t - - - 997
Cash operating loss
US$ m - - - (1.7)
ZAR m - - - (12.4)
Capital expenditure (net)
US$ m - - - 5.6
ZAR m - - - 40.0
Capital expenditure (net)
CASH OPERATING COSTS RECONCILIATION
SOUTH AFRICAN OPERATIONS (R000 unless otherwise stated)
Crown ERPM Blyvoor Total
Total cash costs
Sep 07 Qtr 96 019 116 383 178 574 390 976
Jun 07 Qtr 87 473 105 645 158 442 351 560
Movement in gold in process
Sep 07 Qtr 422 (1 294) 211 (661)
Jun 07 Qtr (447) 3 982 (1 043) 2 492
Less: Exploration, production
taxes, rehabilitation and
other costs Sep 07 Qtr 3 498 2 882 1 577 7 957
Jun 07 Qtr (83) 2 210 1 607 3 734
Less: Retrenchment costs
Sep 07 Qtr - 359 - 359
Jun 07 Qtr - 73 - 73
Less: Corporate and general
administration costs
Sep 07 Qtr 3 632 3 890 3 802 11 324
Jun 07 Qtr 5 311 5 877 2 379 13 567
Cash operating costs
Sep 07 Qtr 89 311 107 958 173 406 370 675
Jun 07 Qtr 81 798 101 467 153 413 336 678
Gold produced (kgs)
Sep 07 Qtr 758 776 1 239 2 773
Jun 07 Qtr 705 608 1 191 2 504
Cash operating costs (R/kg)
Sep 07 Qtr 117 825 139 121 139 956 133 673
Jun 07 Qtr 116 026 166 887 128 810 134 456
Cash operating costs (US$/oz)
Sep 07 Qtr 515 608 611 584
Jun 07 Qtr 507 728 563 587
EXPLORATION AND DEVELOPMENT
SOUTH AFRICAN OPERATIONS
BLYVOOR
Surface
A 17.5 million lb uranium and 0.8 million t sulphur resource for the Blyvoor
tailings dams and a 236% increase in the mine`s surface gold mineral resource to
1.69 million oz, which include 134 000 oz of surface rock dump resource, has
been declared. The resource estimate was conducted by RSG Global using
information obtained from a 36-hole drilling and sampling programme and they
ensured that appropriate QA/QC procedures and assaying at an accredited
laboratory were undertaken.
The mineral resources as tabulated below are classified in accordance with the
South African Code for reporting of Mineral Resources and Mineral Reserves
("SAMREC"). The resources also conform to the Australian Code for Reporting of
Mineral Resources and Ore Reserves ("JORC"), the National Instrument 43-101 and
the Security Exchange Commission ("SEC") Guide 7 definitions.
Uranium mineral resource for the Blyvoor tailings dams
(30 August 2007)
Dump Classification Million U grade U content
(tonnes) (g/t) (lbs)
Bly 1 Indicated 7.104 48 749,000
Bly 4 & 5 Indicated 15.738 64 2,217,000
Bly 6 Indicated 19.899 47 2,073,000
Bly 7 Indicated 42.532 48 4,517,000
Doorn 1 Indicated 22.542 83 4,141,000
Doorn 2 Indicated 9.496 85 1,776,000
Doorn 3 Indicated 17.115 53 1,997,000
Total Indicated 134.426 59 17,470,000
Sulphur mineral resource for the Blyvoor tailings dams
(30 August 2007)
Dump Classification Million S grade S content
(tonnes) (%) (tonnes)
Bly 1 Indicated 7.104 0.47 33,100
Bly 4 & 5 Indicated 15.738 0.94 147,800
Bly 6 Indicated 19.899 0.57 112,900
Bly 7 Indicated 42.532 0.58 246,100
Doorn 1 Indicated 22.542 0.51 115,500
Doorn 2 Indicated 9.496 0.47 45,000
Doorn 3 Indicated 17.115 0.55 94,500
Total Indicated 134.426 0.59 794,900
Gold mineral resource for the Blyvoor tailings dams
(30 August 2007)
Dump Classification Million Au grade Au content
(tonnes) (g/t) (oz)
Bly 1 Indicated 7.104 0.24 55,100
Bly 4 & 5 Measured 15.738 0.73 371,500
Bly 6 Indicated 19.899 0.29 184,700
Bly 7 Indicated 42.532 0.37 502,000
Doorn 1 Indicated 22.542 0.30 215,000
Doorn 2 Indicated 9.496 0.30 91,900
Doorn 3 Indicated 17.115 0.24 132,200
Total Measured 15.738 0.73 371,500
Total Indicated 118.688 0.30 1,180,900
Underground
The exploration drilling programme to evaluate the south west down dip extension
of the ore body south of the Boulder Dyke is currently in the opening up phase.
Crown
Exploration drilling is currently under way to define the uranium potential of
all Crown`s current deposition sites.
ERPM
The drilling of two holes on 66 level Drive West confirmed the presence of 30m
and 10m wide dykes. Drilling from 73 East 4 is currently at 65m, the expected
position of a major fault. Future drilling from 73 East 1 panel will firm up on
the position of the major structure and ascertain if lateral displacement by
younger strike faults has occurred.
An independent technical review ("CPR") conducted by RSG Global has upgraded the
Elsburg tailings dams from an indicated to a measured resource (171.6 million
tons at 0.31 g/t). Additional work is being undertaken to define uranium and
sulphur resources for the dams.
Extension 1 (Sallies)
During the quarter, prospecting was confined within the mining lease area.
However, on completion of the current drilling at 73 East 4, drilling will begin
from 70 level footwall drive east to prospect within Extension 1. The DME has
granted permission to overstope exploration development.
Extension 2 (Sallies)
Historical geological reports and plans pertaining to ERPM Ext 2 have been
sourced, categorized and reviewed. Securing of additional information, including
boreholes and sampling data is in progress.
Argonaut
An application for an extension to the granted prospecting right was rejected on
the grounds that the revised prospecting area underlies a residential township.
Consequently, no exploration activity was conducted within the granted
prospecting right during the quarter under review. A request for ministerial
approval in terms of Section 48 of the Mineral and Petroleum Resources
Development Act to apply for a permit over the residential area is being
pursued.
CHANGE TO THE BOARD OF DIRECTORS
DRDGOLD is pleased to announce that Mr Edmund Jeneker has joined the board as an
independent non-executive director with effect from 1 November 2007.
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 (Acting Chief Financial Officer)
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
1 November 2007
Sponsor
BDO QuestCo
Date: 01/11/2007 08:00:00 Produced by the JSE SENS Department.
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employees and agents accept no liability for (or in respect of) any direct,
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