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DRD
DRDD
DRD - DRDGOLD - Unaudited Group Results For The Quarter And Six Months
Ended 31 December 2007
DRDGOLD LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1895/000926/06)
JSE share code: DRD
ISIN: ZAE000058723
Issuer code: DUSM
Nasdaq trading symbol: DROOY
("DRDGOLD" or "the company")
UNAUDITED GROUP RESULTS FOR THE QUARTER AND SIX MONTHS ENDED 31 DECEMBER
2007
KEY FEATURES
- Sale of Emperor stake completed
- Healthy cash balance
- Production impacted at Blyvoor due to a DME-imposed mine
stoppage and at ERPM due to a sub-shaft man-winder motor problem
- Two-year wage settlement reached
- Measures to manage `December` factor deliver results
KEY RESULTS SUMMARY
GROUP Quarter Quarter % Quarter
Dec 07 Sep 07 Change Dec 06
Gold production
South African operations oz 77 259 89 157 (13) 87 322
kg 2 403 2 773 (13) 2 716
Discontinued operation oz 3 394 10 033 (66) 44 803
kg 106 311 (66) 1 393
Group oz 80 653 99 190 (19) 132 125
kg 2 509 3 084 (19) 4 109
Cash operating costs
South African operations US$/oz 703 584 (20) 505
ZAR/kg 153 690 133 673 (15) 119 388
Discontinued operation US$/oz 1 336 1 017 (31) 659
ZAR/kg 281 613 233 707 (20) 155 940
Group US$/oz 730 628 (16) 558
ZAR/kg 159 094 143 761 (11) 131 780
Gold price received US$/oz 797 693 15 617
ZAR/kg 173 606 158 598 9 145 909
Capital expenditure US$ million 6.7 5.1 (31) 11.5
ZAR million 45.3 36.5 (24) 84.5
GROUP 6 months to 6 months to 6 months to
31 Dec 07 30 Jun 07 31 Dec 06
Gold production
South African operations oz 166 416 155 835 178 661
kg 5 176 4 847 5 557
Discontinued operation oz 13 427 38 999 103 661
kg 417 1 213 3 222
Group oz 179 843 194 834 282 322
kg 5 593 6 060 8 779
Cash operating costs
South African operations US$/oz 639 580 504
ZAR/kg 142 966 133 990 117 565
Discontinued operation US$/oz 1 098 753 604
ZAR/kg 245 885 177 623 140 940
Group US$/oz 673 615 541
ZAR/kg 150 639 142 724 126 144
Gold price received US$/oz 739 671 621
ZAR/kg 165 254 154 892 144 892
Capital expenditure US$ million 11.8 17.3 25.7
ZAR million 81.8 124.5 186.1
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: 393 444 511
STOCK TRADED JSE NASDAQ
Avg. volume for the quarter
per day (000) 643 2 101
% of issued stock traded
(annualised) 45 146
Price - High R 6.55 US$1.029
- Low R 4.70 US$0.697
- Close R 5.40 US$0.710
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 licences 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 2007, which was filed with the United States Securities and
Exchange Commission on 14 December 2007 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
I am saddened to report that two employees died at the Blyvooruitzicht
Gold Mining Company Limited ("Blyvoor") in underground work related
accidents, during the quarter under review. Mr Ncedile Loloni, a loco
guard, died in a tramming accident and Mr Abram Pwetwe, a stoper, died
after being struck by a slab of rock scaled from the working face. In
addition to the above, Blyvoor has also reported disappointing increases
in its dressing station injury frequency rate ("DSIFR"), from 40.35 to
43.6, its disabling injury frequency rate ("DIFR"), from 6.44 to 6.79,
and its reportable injury frequency rate ("RIFR"), from 2.97 to 3.02.
At the East Rand Proprietary Mines Limited ("ERPM"), while the DSIFR
improved from 67.60 to 60.50, the DIFR deteriorated from 6.33 to 8.43 and
the RIFR from 3.21 to 6.32. Crown`s DSIFR deteriorated from 13.98 to
18.22, the DIFR from 5.99 to 7.09, and the RIFR from 0.99 to 2.02.
Given these disappointing results, it is apposite that we have launched a
behaviour-based safety initiative. Recent research indicates that
behaviour is the cause of 76% of accidents, conditions and behaviour the
cause of 20%, and conditions the cause of 4%.
On a positive note, Blyvoor`s 10th consecutive win in 2007 of the West
Rand Mine Managers` Association Inter-Mine Safety Competition with a RIFR
of 3.136 was announced early in the current quarter.
Production
Group gold production from continuing operations for the quarter under
review was 13% lower at 77 259 oz. This was due primarily to the loss of
seven production shifts at the Blyvoor mine in October 2007 arising from
a stoppage imposed by the Department of Minerals and Energy`s ("DME")
Safety Inspectorate on underground mining operations following the afore-
mentioned two fatalities, and to breakdowns of the main ventilation fan
and sub-shaft man-winder motor at ERPM. The December month year on year
was positive for both Blyvoor and ERPM.
Financial
Revenue was 4% lower at R416.9 million as a result of the lower gold
production. After accounting for cash operating costs, virtually
unchanged at R369.3 million, cash operating profit was 24% lower at R47.6
million.
Board appointment
It was with great pleasure that we announced during the quarter the
appointment of Edmund Jeneker to the DRDGOLD Board of Directors. Edmund
has extensive experience in business strategy and general management. We
look forward enormously to his contribution to the company.
Looking ahead
While we remain firmly of the view that the Safety Inspectorate`s seven-
day stoppage of underground production during the quarter - with such
serious consequences for the performance of the operation and the company
as a whole - was unnecessary, it is pleasing to report that subsequently
the parties are addressing their mutual concern about mine safety in a
more pragmatic and constructive manner.
The breakdowns at ERPM demonstrate clearly the importance of ongoing,
substantive infrastructure maintenance. From the outset, this has been a
key element in our drive to return the South African operations to
sustainable levels of stability, and will continue to be so into the
future. In addition to growth, there is no other more sensible
application of the company`s healthy cash reserves.
Various role-players have voiced their disquiet regarding the
implications for the South African mining industry of the electricity
supply shortage, now and going forward. We share this concern of course,
but believe that the most constructive course of action is for
Government, Eskom and key, major consumers, such as ourselves, to
continue to co-operate in both finding and applying workable solutions.
We have, for example, some track record of success in working with Eskom
over the past two years in effecting meaningful power savings at our
Blyvoor operations. Co-operation between the parties most recently has
resulted in Eskom committing to the provision of advance warning of
impending power cuts which at least allows for a measure of planning and
for safety at our operations.
We continue apace with project developments at each of our South African
operations. At Blyvoor, delays on the Way Ahead ore replacement project
will be made up and early, low-level production is expected to start, on
schedule, in the September 2008 quarter. Exploration drilling to evaluate
the south-west, down-dip extension of the ore body south of the Boulder
Dyke is under way. At ERPM, the DME has approved overstoping of the
exploration development into Extension 1, which will permit upgrading
from a measured and indicated resource to a proven and probable reserve
for the June 2008 annual ore reserve declaration. At Crown - now that the
Gauteng Heritage Resources Authority has dropped its opposition to our
recovery of the Top Star dump we are ready to begin work almost as soon
as a positive response from the DME to our application for a mining
licence is received. At our Ergo 50:50 Joint Venture with Mintails, Phase
1 development is progressing and we look forward to the start of gold
production from the refurbished Brakpan plant during the last quarter of
this year.
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).
CONSOLIDATED INCOME STATEMENT Quarter Quarter Quarter
(Unaudited) Dec 07 Sep 07 Dec 06
Rm Rm Rm
Continuing operations
Gold and silver revenue 416.9 433.0 390.6
Cash operating costs (369.3) (370.3) (324.3)
Cash operating profit 47.6 62.3 66.3
Administration and general
other costs (17.7) (22.8) (37.4)
Share-based payments (0.9) (0.5) (0.5)
Care and maintenance costs (2.8) (2.5) (2.8)
Profit from operations 26.2 37.5 25.6
Retrenchment costs (5.1) (1.1) -
Investments income 15.4 (2.3) 16.2
Finance expenses (4.8) (8.4) (22.8)
Net operating profit 31.7 25.7 19.0
Rehabilitation (4.8) (4.7) (3.1)
Depreciation (19.9) (19.7) (22.4)
Loss on financial instruments (0.8) - -
Movement in gold process 1.3 (0.6) 0.6
Profit/(loss) before taxation 7.5 0.7 (5.9)
Taxation (3.5) - (0.2)
Profit/(loss) after taxation 4.0 0.7 (6.1)
Profit/(loss) on sale of investment - 12.0 (7.8)
Impairments - - 15.6
Discontinued operations
Loss for the period from
discontinued operations 6.6 (56.6) (140.1)
Profit on sale of investments 118.3 1 008.0 -
Impairment from discontinued
operations (44.4) - (783.1)
Net profit/(loss) for the period 84.5 964.1 (921.5)
Attributable to:
Minority interest (8.7) 207.0 (194.1)
Ordinary shareholders of the
company 93.2 757.1 (727.4)
84.5 964.1 (921.5)
Headline profit/(loss) per share-cents
from continuing operations 1.1 0.2 (1.9)
from total operations 2.4 (11.7) (47.5)
Basic profit/(loss) per share-cents
from continuing operations 1.1 3.4 (11.7)
from total operations 24.8 201.8 (220.9)
Calculated on the weighted average
ordinary shares issued of: 376 141 981 375 196 329 329 252 570
Diluted headline profit/(loss)
per share-cents 2.4 (11.7) (47.5)
Diluted basic profit/(loss)
per share-cents 24.8 201.8 (220.9)
6 months to 6 months to 6 months to
31 Dec 07 30 Jun 07 31 Dec 06
Rm Rm Rm
Gold and silver revenue 849.9 738.0 796.8
Cash operating costs (740.0) (649.3) (653.4)
Cash operating profit 109.9 88.7 143.4
Administration and general
other costs (40.5) (41.9) (64.4)
Share-based payments (0.4) (3.7) (3.9)
Care and maintenance costs (5.3) (5.7) (4.9)
Profit from operations 63.7 37.4 70.2
Retrenchment costs (6.2) (0.8) -
Investments income 13.1 11.5 9.2
Finance expenses (13.2) 9.3 (30.6)
Net operating profit 57.4 57.4 48.8
Rehabilitation (9.5) (13.8) (6.2)
Depreciation (39.6) (29.4) (34.6)
Loss on financial instruments (0.8) (8.6) -
Movement in gold process 0.7 1.5 1.4
Profit/(loss) before taxation 8.2 7.1 9.4
Taxation (3.5) (0.4) (0.3)
Profit after taxation 4.7 6.7 9.1
Profit/(loss)on sale of investment 12.0 (0.2) (7.8)
Impairments - 2.4 15.6
Discontinued operations
Loss for the period from
discontinued operations (50.0) (150.0) (235.8)
Profit on sale of investments 1 126.3 90.8 0.1
Impairment from discontinued
operations (44.4) (112.8) (783.1)
Net profit/(loss) for the period 1 048.6 (163.1) (1 001.9)
Attributable to:
Minority interest 198.3 (32.1) (208.4)
Ordinary shareholders of the
company 850.3 (131.0) (793.5)
1 048.6 (163.1) (1 001.9)
Headline profit/(loss) per share-cents
from continuing operations 1.3 1.9 2.8
from total operations (9.2) (32.1) (68.5)
Basic profit/(loss) per share-cents
from continuing operations 4.4 (18.9) (9.0)
from total operations 226.3 (37.9) (244.0)
Calculated on the weighted average
ordinary shares issued of: 375 669 155 345 793 620 325 172 488
Diluted headline loss
per share-cents (9.2) (32.0) (68.5)
Diluted basic profit/(loss)
per share-cent 226.3 (37.9) (244.0)
SEGMENTAL INFORMATION FOR THE QUARTER ENDED DECEMBER 2007
South Africa Discontinued Other
Rm Rm Rm
Gold and silver revenue 416.9 18.6 -
Cash operating costs (369.3) (29.8) -
Cash operating profit/(loss) 47.6 (11.2) -
Corporate administration and
other expenses (12.5) (14.9) (5.2)
Share based payments - - (0.9)
Exploration costs - - -
Care and maintenance costs - - (2.8)
Profit/(loss) from operations 35.1 (26.1) (8.9)
Retrenchment costs (0.9) - (4.2)
Investment income 3.3 (0.2) 12.1
Finance expense (6.8) 0.6 2.0
Net operating profit/(loss) 30.7 (25.7) 1.0
Rehabilitation (3.6) (3.8) (1.1)
Depreciation (24.1) 5.4 4.1
Loss on financial instruments - (1.0) (0.8)
Movement in gold process 1.3 2.8 -
Profit/(loss) before taxation 4.3 (22.3) 3.2
Taxation (3.5) 0.7 -
Deferred taxation - 28.2 -
Profit/(loss) after taxation 0.8 6.6 3.2
SEGMENTAL INFORMATION FOR THE QUARTER ENDED SEPTEMBER 2007
South Africa Discontinued Other
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)
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 expense (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)
CONDENSED CONSOLIDATED
Balance Sheet As at As at As at As at
(Unaudited) 31 Dec 07 30 Sep 07 30 Jun 07 31 Dec 06
Rm Rm Rm Rm
Assets
Property, plant and equipment 652.3 627.0 649.8 680.3
Investments 57.7 59.8 59.7 61.8
Environmental rehabilitation
trust funds 82.8 79.2 75.8 67.0
Current assets 956.6 1 177.0 1 161.9 1 178.3
Inventories 69.2 58.2 108.7 109.5
Trade and other receivables 123.2 58.9 65.0 68.4
Financial assets - - 6.0 9.8
Cash and cash equivalents 749.2 425.4 135.3 134.3
Assets classified as held
for sale 15.0 634.5 846.9 856.3
1 749.4 1 943.0 1 947.2 1 987.4
Equity and Liabilities
Equity 1 130.2 1 251.8 143.5 109.5
Shareholders equity 1 083.5 1 073.8 141.2 77.1
Minority shareholders` interest 46.7 178.0 2.3 32.4
Long-term liabilities 49.2 49.2 49.2 278.0
Post retirement and other
employee benefits 21.5 20.9 26.0 21.1
Provision for environmental
rehabilitation 288.3 279.8 282.6 281.4
Deferred mining and income taxes - - 104.3 99.5
Current liabilities 260.2 341.3 1 341.6 1 197.9
Trade and other liabilities 260.2 250.8 422.1 450.5
Financial liabilities - - - 207.5
Current portion of
long-term liabilities - - 790.3 406.8
Liabilities classified as held
for sale - 90.5 129.3 133.1
1 749.4 1 943.0 1 947.2 1 987.4
CONDENSED CONSOLIDATED Quarter Quarter Quarter
Statement of changes in equity Dec 07 Sep 07 Dec 06
(Unaudited) Rm Rm Rm
Balance at the beginning
of the period 1 251.8 143.5 1 093.3
Share capital issued 0.9 26.6 84.7
for acquisition finance and cash - 28.0 88.2
for share options exercised - - 0.7
for increase in share-based
payment reserve 0.9 (0.5) 0.5
for costs - (0.9) (4.7)
Net profit/(loss) attributed to
ordinary shareholders 93.2 757.1 (727.4)
Net (loss)/profit attributed to
minority shareholders (8.7) 207.0 (194.1)
(Decrease)/increase in minorities (152.1) - 18.5
Currency translation
adjustments and other (54.9) 117.6 (165.5)
Balance as at the
end of the period 1 130.2 1 251.8 109.5
Reconciliation of headline loss
Net loss 93.2 757.1 (727.4)
Adjusted for:
Impairments - - (15.6)
Impairment from discontinued
Operations 44.4 - 783.1
Minority share of impairment from
discontinued operations (9.5) - (204.4)
Profit on sale of discontinued
operations (118.3) (1 008.0) -
Minority share of profit on sale
of investments (0.6) 219.0 -
Profit on sale of investments - (12.0) 7.8
Headline loss 9.2 (43.9) (156.5)
CONDENSED CONSOLIDATED 6 months 6 months 6 months
Statement of changes in equity 31 Dec 07 30 Jun 07 31 Dec 06
(Unaudited) Rm Rm Rm
Balance at the beginning
of the period 143.5 109.5 1 015.3
Share capital issued 27.5 197.2 126.2
for acquisition finance and cash 28.0 186.3 128.2
for share options exercised - - 1.0
for increase in share-based
payment reserve 0.4 11.8 3.9
for costs (0.9) (0.9) (6.9)
Net profit/(loss) attributed to
ordinary shareholders 850.3 (131.0) (793.5)
(Net profit/(loss) attributed to
minority shareholders 198.3 (32.1) (208.4)
(Decrease)/increase in minorities (152.1) - 18.5
Currency translation
adjustments and other 62.7 (0.1) (48.6)
Balance as at the
end of the period 1 130.2 143.5 109.5
Reconciliation of headline loss
Net profit/(loss) 850.3 (131.0) (793.5)
Adjusted for:
Impairments - 86.4 (15.6)
Impairment from discontinued
Operations 44.4 24.1 783.1
Minority share of impairment - (13.8) -
Minority share of impairment from
discontinued operations (9.5) (5.1) (204.4)
Profit on sale of discontinued
operations (1 126.3) (90.8) (0.1)
Minority share of profit on sale
of investments 218.4 19.2 -
(Profit)/loss on sale of investments (12.0) 0.2 7.8
Headline loss (34.7) (110.8) (222.7)
CONDENSED CONSOLIDATED Quarter Quarter Quarter
Cash Flow Statement Dec 07 Sep 07 Dec 06
(Unaudited) Rm Rm Rm
Net cash in/(out)flow from operations 13.3 (35.1) (84.2)
Working capital changes (373.5) (274.6) 57.2
Net cash in/(out)flow from
investing activities 240.9 1 870.4 (72.1)
Net cash in/(out)flow from
financing activities 20.1 (1 059.6) (203.4)
(Decrease)/ increase in
cash and cash equivalents (99.2) 501.1 (302.5)
Translation adjustment (48.9) 258.5 (46.0)
Opening cash and cash equivalents 897.3 137.7 517.2
Closing cash and cash equivalents 749.2 897.3 168.7
Cash classified as assets held
for sale included in the
closing balance - 471.9 34.4
Reconciliation of net cash out flow from operations
Net operating profit 31.7 25.7 19.0
Net operating loss from
discontinued operations (25.7) (81.4) (101.2)
6.0 (55.7) (82.2)
Adjusted for:
Interest provision 3.9 3.9 (7.0)
Amortisation of convertible cost - - 1.8
Financial instruments 1.8 (0.6) 23.7
Unrealised foreign exchange loss/(gain)4.2 38.1 (9.8)
Growth in Environmental Trust funds (2.0) (1.8) (2.3)
Other non cash items 8.4 38.5 36.8
Interest paid (1.6) (34.2) (44.3)
Taxation paid 0.4 (23.3) (0.9)
Net cash in/(out)flow from operations 13.3 (35.1) (84.2)
CONDENSED CONSOLIDATED Quarter Quarter Quarter
Cash Flow Statement Dec 07 Sep 07 Dec 06
(Unaudited) Rm Rm Rm
Net cash out flow from operations (21.8) (51.9) (95.7)
Working capital changes (648.1) 108.7 128.4
Net cash in/(out)flow from
investing activities 2 111.3 (134.2) (177.9)
Net cash (out)/in flow from
financing activities (1 039.5) 109.8 (165.0)
Increase/(decrease in
cash and cash equivalents 401.9 32.4 (310.2)
Translation adjustment 209.6 (63.4) (10.1)
Opening cash and cash equivalents 137.7 168.7 489.0
Closing cash and cash equivalents 749.2 137.7 168.7
Cash classified as assets held
for sale included in the
closing balance - 2.4 34.4
Reconciliation of net cash out flow from operations
Net operating profit 57.4 57.4 48.8
Net operating loss from
discontinued operations (107.1) (85.2) (143.4)
(49.7) (27.8) (94.6)
Adjusted for:
Interest provision - - -
Amortisation of convertible cost - 0.8 3.5
Financial instruments 1.2 23.8 27.9
Unrealised foreign exchange loss/
(gain) 42.3 (14.0) 6.6
Growth in Environmental Trust funds (3.8) (5.0) (3.1)
Other non cash items 46.9 4.6 40.2
Interest paid (35.8) (19.7) (56.5)
Taxation paid (22.9) (14.6) (19.7)
Net cash outflow from operations (21.8) (51.9) (95.7)
KEY OPERATING AND FINANCIAL RESULTS (Unaudited)
SOUTH AFRICAN OPERATIONS
Blyvoor Quarter Quarter % Quarter
Dec 07 Sep 07 Change Dec 06
Ore milled
Underground t`000 164 194 (15) 183
Surface t`000 937 856 9 896
Total t`000 1 101 1 050 5 1 079
Yield
Underground g/t 4.80 5.03 (5) 5.06
Surface g/t 0.30 0.31 (3) 0.32
Total g/t 0.97 1.18 (18) 1.12
Gold produced
Underground oz 25 302 31 347 (19) 29 772
kg 787 975 (19) 926
Surface oz 9 131 8 488 8 9 099
kg 284 264 8 283
Total oz 34 433 39 835 (14) 38 871
kg 1 071 1 239 (14) 1 209
Cash operating costs
Underground US$/oz 823 667 (23) 582
ZAR/kg 179 621 152 673 (18) 137 586
ZAR/t 862 767 (12) 696
Surface US$/oz 418 406 (3) 313
ZAR/kg 91 415 92 992 2 73 926
ZAR/t 28 29 3 23
Total US$/oz 715 611 (17) 519
ZAR/kg 156 232 139 956 (12) 122 685
ZAR/t 152 165 8 137
Cash operating profit
US$ m 2.9 2.8 4 3.5
ZAR m 19.6 20.0 (2) 25.4
Capital expenditure (net)
US$ m 2.5 1.9 (32) 2.3
ZAR m 17.0 13.7 (24) 16.9
6 months to 6 months to 6 months to
31 Dec 07 30 Jun 07 31 Dec 06
Ore milled
Underground t`000 358 325 365
Surface t`000 1 793 1 832 1 862
Total t`000 2 151 2 157 2 227
Yield
Underground g/t 4.92 4.84 5.10
Surface g/t 0.31 0.36 0.32
Total g/t 1.07 1.04 1.11
Gold produced
Underground oz 56 649 50 574 59 897
kg 1 762 1 573 1 863
Surface oz 17 619 21 347 19 451
kg 548 664 605
Total oz 74 268 71 921 79 348
kg 2 310 2 237 2 468
Cash operating costs
Underground US$/oz 736 687 605
ZAR/kg 164 709 158 655 141 059
ZAR/t 811 768 720
Surface US$/oz 412 274 303
ZAR/kg 92 175 63 187 70 540
ZAR/t 28 23 23
Total US$/oz 659 564 531
ZAR/kg 147 502 130 317 123 772
ZAR/t 158 135 137
Cash operating profit US$ m 5.7 6.8 6.7
ZAR m 39.6 49.2 48.4
Capital expenditure (net)US$ m 4.4 4.5 5.0
ZAR m 30.7 32.5 36.0
Total gold production was 14% lower at 34 433 oz, reflecting a 19% drop
in underground gold production to 25 302 oz. This was primarily a
consequence of seven production shifts lost due to a stoppage imposed by
the DME`s Safety Inspectorate in October 2007 on underground mining
operations following two fatalities.
Throughput from underground was 15% lower at 164 000 t. The average
underground yield was 5% lower at 4.80 g/t, mainly due to the depletion
of available ground in the Savuka boundary area. New mining face
resulting from the Way Ahead Project will help to make up for this
depletion.
Gold production from surface sources was 8% higher at 9 131 oz,
reflecting a 9% increase in throughput to 937 000 t in order to partially
offset the negative impact of the afore-mentioned stoppage on underground
mining. The average surface yield was slightly lower at 0.30 g/t due to
increased throughput of lower grade rock dump material.
Measures taken to minimise the impact of the Christmas break realised a
production increase from underground year on year for the month of
December of 10%.
Total cash operating costs rose by 17% to $715/oz as a result of
underground cash operating costs increasing 23% to $823/oz which was due
to lower gold production from underground. Surface cash operating costs
rose by 3% due to higher screening volumes. Cash operating profit was
held steady at R19.6 million due to the higher average gold price
received.
Capital expenditure increased by 24% to R17 million, the major items
being raise boring costs associated with the development of a new ore
pass system to permit the splitting of ore and waste and the installation
of back-up power cabling for production and pumping at No 4 Shaft.
Development work on the Way Ahead Project fell slightly behind due to the
need to rehabilitate portions of the tunnel on 27 Level. Opening up and
equipping continues however on 27, 29, 31 and 33 levels, with early low-
level production expected to begin, on schedule, during the first quarter
of the new financial year.
Crown Quarter Quarter % Quarter
Dec 07 Sep 07 Change Dec 06
Ore milled t`000 2 138 2 147 - 2 231
Yield g/t 0.30 0.35 (14) 0.41
Gold produced oz 20 737 24 371 (15) 29 643
kg 645 758 (15) 922
Cash operating costs
US$/oz 617 515 (20) 399
ZAR/kg 134 798 117 825 (14) 94 268
ZAR/t 41 42 2 39
Cash operating profit
US$ m 3.6 4.1 (12) 6.2
ZAR m 24.6 29.3 (16) 46.0
Capital expenditure (net)
US$ m 0.3 0.2 (50) 0.5
ZAR m 2.2 1.5 (47) 3.8
6 months to 6 months to 6 months to
31 Dec 07 30 Jun 07 31 Dec 06
Ore milled t`000 4 285 4 118 4 287
Yield g/t 0.33 0.35 0.41
Gold produced oz 45 108 45 847 57 164
kg 1 403 1 426 1 778
Cash operating costs US$/oz 562 499 411
ZAR/kg 125 628 115 215 95 801
ZAR/t 41 40 40
Cash operating profit US$ m 7.7 7.4 11.7
ZAR m 53.9 53.1 85.1
Capital expenditure (net)US$ m 0.5 2.7 1.5
ZAR m 3.7 19.1 10.9
Gold production was 15% lower at 20 737 oz due to a 14% decrease in the
average yield to 0.30 g/t. This reflects the impact of higher volumes of
3L2 dump material reporting to the Crown plant which is lower in grade
than the depleted sand material treated previously. Throughput was
unchanged at 2 138 000 t.
Cash operating costs rose by 20% to $617/oz, primarily a consequence of
lower production and the implementation of wage increases. Cash operating
profit was 16% lower at R24.6 million.
We await a response from the DME to the company`s application for a
licence to mine the Top Star dump. A significant positive development
during the quarter was notification published in the Gauteng Provincial
Government Gazette from the Gauteng Provincial Heritage Resources
Authority that it has lifted its objection to the mining of the dump.
Top Star is estimated to contain some 5.2 million t of material at a
recovered grade of 0.47 g/t, yielding 78 000 oz of gold. It is planned to
retreat this material through the Crown plant over a 20-month period at a
rate of approximately 260 000 t per month.
ERPM Quarter Quarter % Quarter
Dec 07 Sep 07 Change Dec 06
Ore milled
Underground t`000 72 85 (15) 64
Surface t`000 504 506 - 388
Total t`000 576 591 (3) 452
Yield
Underground g/t 7.11 6.47 10 7.06
Surface g/t 0.35 0.45 (22) 0.34
Total g/t 1.19 1.31 (9) 1.29
Gold produced
Underground oz 16 463 17 684 (7) 14 532
kg 512 550 (7) 452
Surface oz 5 626 7 267 (23) 4 276
kg 175 226 (23) 133
Total oz 22 089 24 951 (11) 18 808
kg 687 776 (11) 585
Cash operating costs
Underground US$/oz 777 647 (20) 627
ZAR/kg 170 171 148 145 (15) 148 044
ZAR/t 1 210 955 (27) 1 046
Surface US$/oz 729 512 (42) 704
ZAR/kg 159 537 117 159 (36) 166 173
ZAR/t 55 52 (6) 57
Total US$/oz 765 608 (26) 644
ZAR/kg 167 463 139 121 (20) 152 166
ZAR/t 200 183 (9) 197
Cash operating profit/(loss)
US$ m 0.6 1.8 (67) (0.7)
ZAR m 3.5 13.0 (73) (5.1)
Capital expenditure (net)
US$ m 1.3 0.9 (44) 1.2
ZAR m 9.0 6.2 (45) 8.5
6 months to 6 months to 6 months to
31 Dec 07 30 Jun 07 31 Dec 06
Ore milled
Underground t`000 157 129 140
Surface t`000 1 010 930 823
Total t`000 1 167 1 059 963
Yield
Underground g/t 6.75 6.08 7.30
Surface g/t 0.40 0.43 0.35
Total g/t 1.25 1.12 1.36
Gold produced
Underground oz 34 147 25 206 32 857
kg 1 062 784 1 022
Surface oz 12 893 12 861 9 292
kg 401 400 289
Total oz 47 040 38 067 42 149
kg 1 463 1 184 1 311
Cash operating costs
Underground US$/oz 710 775 562
ZAR/kg 158 765 178 953 130 998
ZAR/t 1 072 1 088 956
Surface US$/oz 606 577 647
ZAR/kg 135 653 133 335 150 938
ZAR/t 54 57 53
Total US$/oz 681 708 581
ZAR/kg 152 430 163 541 135 394
ZAR/t 191 183 184
Cash operating profit/(loss)
US$ m 2.4 (1.9) 1.4
ZAR m 16.5 (13.8) 10.0
Capital expenditure (net)US$ m 2.2 3.3 2.3
ZAR m 15.2 24.0 16.6
Total gold production was 11% lower at 22 089 oz. This was due both to a
7% decline in underground gold production to 16 463 oz and a 23% decline
in surface gold production to 5 626 oz.
While the average underground yield improved by 10% to 7.11 g/t,
underground throughput was 15% lower at 72 000 t, reflecting the impact
on underground production of both a main ventilation fan breakdown in
October/November and the previously reported sub-shaft man-winder motor
breakdown in December.
Surface throughput was steady at 504 000 t, reflecting benefits flowing
from the recent completion of infrastructure upgrades. The average
surface yield was 22% lower at 0.35 g/t however, due to steps begun to
improve the shape of the Cason Dump recovery face.
The effort that went into the reversal of negative trends from
underground operations over the Christmas break realised a year on year
production increase of 25% for the month of December.
Total cash operating costs were 26% higher at $765/oz as a result of
lower gold production. Underground cash operating costs rose by 20% to
$777/oz and surface cash operating costs by 42% to $729/oz. Cash
operating profit narrowed from R13.0 million to R3.5 million.
Capital expenditure rose by 45% to R9.0 million. Key items include
repairs to the ventilation fan and man-winder motor, replacement of 900
metres of power feeder cable in the main vertical shaft, completion of
the South West Vertical ("SWV") Shaft pumping upgrade and capitalisation
of some costs relating to the Far East Vertical ("FEV") Shaft plugging
project.
Following the completion of the SWV pumping upgrade, water from the
Hercules Basin is now being pumped at a rate of between 13 and 17
megalitres a day. This contributes to a total of some 60 megalitres a
day, the balance being pumped from the Central Witwatersrand Basin.
Completion of the FEV plugging project to isolate the FEV Shaft from
rising water in the Central Witwatersrand Basin is scheduled for
completion in March 2008. Work to reduce the ERPM plant footprint, with
consequent rehabilitation cost benefits, has been finished.
DISCONTINUED OPERATIONS - EMPEROR MINES LIMITED
Tolukuma Quarter Quarter % Quarter
Dec 07 Sep 07 Change Dec 06
Ore milled
Underground t`000 11 45 (76) 45
Yield g/t 9.64 6.91 40 8.29
Gold produced oz 3 394 10 033 (66) 11 996
kg 106 311 (66) 373
Cash operating costs
US$/oz 1 336 1 017 (31) 827
ZAR/kg 292 887 233 707 (25) 195 319
ZAR/t 2 822 1 615 (75) 1 619
Cash operating loss
US$ m (1.7) (0.9) (89) (1.0)
ZAR m (11.5) (6.5) (77) (8.3)
Capital expenditure (net)
US$ m 0.1 2.1 95 1.6
ZAR m 0.3 15.0 98 11.8
6 months to 6 months to 6 months to
31 Dec 07 30 Jun 07 31 Dec 06
Ore milled t`000 56 97 88
Yield g/t 7.45 6.43 8.52
Gold produced oz 13 427 20 044 24 137
kg 417 624 750
Cash operating costs US$/oz 1 098 914 831
ZAR/kg 248 751 210 732 193 969
ZAR/t 1 852 1 356 1 653
Cash operating loss US$ m (2.6) (3.2) (4.0)
ZAR m (18.0) (23.4) (29.1)
Capital expenditure (net)US$ m 2.2 2.9 3.6
ZAR m 15.3 20.5 26.1
Porgera (20% of the Quarter Quarter % Quarter
Joint Venture) Dec 07 Sep 07 Change Dec 06
Ore milled t`000 - - - 238
Yield g/t - - - 3.09
Gold produced oz - - - 23 664
kg - - - 736
Cash operating costs
US$/oz - - - 396
ZAR/kg - - - 93 834
ZAR/t - - - 290
Cash operating profit
US$ m - - - 3.3
ZAR m - - - 24.2
Capital expenditure (net)
US$ m - - - 2.8
ZAR m - - - 19.9
6 months to 6 months to 6 months to
31 Dec 07 30 Jun 07 31 Dec 06
Ore milled t`000 - 214 500
Yield g/t - 2.69 3.30
Gold produced oz - 18 525 53 043
kg - 576 1 649
Cash operating costs US$/oz - 597 399
ZAR/kg - 139 262 93 117
ZAR/t - 375 307
Cash operating profit US$ m - 5.4 7.8
ZAR m - 37.4 56.4
Capital expenditure (net)US$ m - 3.8 4.5
ZAR m - 26.7 32.9
Vatukoula Quarter Quarter % Quarter
Dec 07 Sep 07 Change Dec 06
Ore milled t`000 - - - 37
Yield g/t - - - 7.68
Gold produced oz - - - 9 143
kg - - - 284
Cash operating costs
US$/oz - - - 1 120
ZAR/kg - - - 265 169
ZAR/t - - - 2 035
Cash operating profit
US$ m - - - (4.1)
ZAR m - - - (29.4)
Capital expenditure (net)
US$ m - - - 3.3
ZAR m - - - 24.7
6 months to 6 months to 6 months to
31 Dec 07 30 Jun 07 31 Dec 06
Ore milled t`000 - - 117
Yield g/t - - 7.03
Gold produced oz - 429 26 481
kg - 13 823
Cash operating costs US$/oz - - 807
ZAR/kg - - 188 436
ZAR/t - - 1 326
Cash operating loss US$ m - 1.0 (5.8)
ZAR m - 7.1 (41.9)
Capital expenditure (net)US$ m - 0.1 8.9
ZAR m - 0.7 64.6
The sale of DRDGOLD`s interest in Emperor Mines Limited was completed on
22 October 2007. There have been no material changes to the DRDGOLD`s
Mineral Resource and Ore Reserve statement published in the annual report
for the year ended 30 June 2007.
CASH OPERATING COSTS RECONCILIATION
SOUTH AFRICAN OPERATIONS(R000 unless otherwise stated)
Crown ERPM Blyvoor Total
Total cash costs
Dec 07 Qtr 93 557 120 769 172 440 386 766
Sep 07 Qtr 96 019 116 383 178 574 390 976
6 months to Dec 07 189 576 237 152 351 014 777 742
Movement in gold in process
Dec 07 Qtr 687 442 163 1 292
Sep 07 Qtr 422 (1 294) 211 (661)
6 months to Dec 07 1 109 (852) 374 631
Less: Production taxes,
rehabilitation and other
Dec 07 Qtr 3 664 2 224 1 518 7 406
Sep 07 Qtr 3 498 2 882 1 577 7 957
6 months to Dec 07 7 162 5 106 3 095 15 363
Less: Retrenchment costs
Dec 07 Qtr - 7 - 7
Sep 07 Qtr - 359 - 359
6 months to Dec 07 - 366 - 366
Less: Corporate and general
administration costs
Dec 07 Qtr 3 635 3 933 3 761 11 329
Sep 07 Qtr 3 632 3 890 3 802 11 324
6 months to Dec 07 7 267 7 823 7 563 22 653
Cash operating costs
Dec 07 Qtr 86 945 115 047 167 324 369 316
Sep 07 Qtr 89 311 107 958 173 406 370 675
6 months to Dec 07 176 256 223 005 340 730 739 991
Gold produced (kg)
Dec 07 Qtr 645 687 1 071 2 403
Sep 07 Qtr 758 776 1 239 2 773
6 months to Dec 07 1 403 1 463 2 310 5 176
Cash operating costs (R/kg)
Dec 07 Qtr 134 798 167 463 156 232 153 690
Sep 07 Qtr 117 825 139 121 139 956 133 673
6 months to Dec 07 125 628 152 430 147 502 142 966
Cash operating costs (US$/oz)
Dec 07 Qtr 617 765 715 703
Sep 07 Qtr 515 608 611 584
6 months to Dec 07 562 681 659 639
EXPLORATION AND DEVELOPMENT
Blyvoor
The exploration drilling programme to evaluate the south-west, down-dip
extension of the ore body south of the Boulder Dyke is predominately in
the opening-up phase.
Crown/ERGO
RSG Global`s final independent competent person`s report for the Elsburg
Tailings Complex upgrades the resource from an indicated to a measured
resource (171.6 million tons at 0.30 g/t). Subsequent work is being
undertaken to define uranium and sulphur resources for the dams.
During the quarter, an additional 23 holes were drilled in an attempt to
ensure that measured resources are declared. All sampling has been
completed in the prescribed manner and submitted to an independent
accredited laboratory for gold, uranium and sulphur assays.
Current exploration, concentrated on defining the uranium potential of
the current deposition sites, involves drilling a minimum of 10 holes per
dump. To date, drilling has been undertaken at Rooikraal, Daggafontein
and 3L8 dump.
ERPM
Prospecting from 73 East 4 for the major dip fault ahead of stoping
operations did not intersect the fault at 65 m in the 96.8 m long
borehole as expected. Drilling indicates that the fault has been
laterally displaced by an east/west trending dyke. An additional hole
will be drilled from 73 E1, north of the dyke, to verify the geological
interpretation.
Extension 1 (Sallies)
The DME has approved the overstoping of the exploration development into
ERPM Extension 1. This will permit the upgrading of the said area from a
measured and indicated resource to a proven and probable reserve for the
June 2008 annual ore reserve declaration.
During the quarter, prospecting was confined to the mining lease area.
However, future drilling from 70 level footwall drive east will intersect
reef, close to or within Extension 1.
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 ; EJ Jeneker
Alternate:
JH Dissel (Acting Chief Financial Officer)
Company Secretary:
TJ Gwebu
Sponsor:
QuestCo
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.
Johannesburg
21 February 2008
Date: 21/02/2008 08:00:01 Produced by the JSE SENS Department.
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