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DRD
DRDD
DRD - DRDGold - Report To Shareholders For The Quarter And Year Ended
30 June 2008
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: DROO
("DRDGOLD" or "the company")
REPORT TO SHAREHOLDERS FOR THE QUARTER AND YEAR ENDED 30 JUNE 2008
GROUP RESULTS
KEY FEATURES
- Dividend declared of 10 cents per share
- Behavior-based safety initiative being rolled out at all operations
- Attributable reserves up 25% from 6.3 million oz to 7.9 million oz
- Net profit after tax from continuing operations for the year up from R3.1
million to R154.4 million
- Adjusted headline earnings from continuing operations for the year up from
3.8 cents per share to 64.9 cents per shares
- Strong balance sheet with cash equivalent to R2.25 per share
REVIEW OF OPERATIONS
GROUP Quarter Quarter % Quarter
Jun 08 Mar 08 Change Jun 07
Gold production
South African operations oz 71 211 70 378 1 80 505
kg 2 215 2 189 1 2 504
Discontinued operation oz - - - 10 562
kg - - - 329
Group oz 71 211 70 378 1 91 067
kg 2 215 2 189 1 2 833
Cash operating costs
South African operations US$/oz 689 667 (3) 587
ZAR/kg 173 034 162 806 (6) 134 456
Discontinued operation US$/oz - - - 906
ZAR/kg - - - 206 775
Group US$/oz 689 667 (3) 624
ZAR/kg 173 034 162 806 (6) 144 176
Gold price received US$/oz 893 943 (5) 681
ZAR/kg 224 552 228 836 (2) 155 198
Capital expenditure US$ million 20.0 4.7 (326) 8.3
ZAR million 149.8 35.6 (321) 58.6
Average Exchange rate ZAR:US$ 7.82 7.55 (4) 7.09
Dividends cps 10 - - -
12 months to 12 months to
30 Jun 08 30 Jun 07
Gold production
South African operations oz 308 005 334 496
kg 9 580 10 404
Discontinued operation oz 13 427 142 661
kg 417 4 435
Group oz 321 432 477 157
kg 9 997 14 839
Cash operating costs
South African operations US$/oz 657 540
ZAR/kg 154 451 125 217
Discontinued operation US$/oz 1 098 645
ZAR/kg 264 264 150 973
Group US$/oz 675 571
ZAR/kg 159 032 132 915
Gold price received US$/oz 817 643
ZAR/kg 192 143 149 133
Capital expenditure US$ million 36.5 43.0
ZAR million 267.2 310.6
Average Exchange rate ZAR:US$ 7.31 7.21
Dividends cps 10 -
STOCK
ISSUED CAPITAL
376 571 588 ordinary no par value shares
5 000 000 cumulative preference shares
Total ordinary no par value shares issued and committed: 392 507 207
STOCK TRADED JSE NASDAQ
Avg. volume for the quarter per day (000) 1 179 1 948
% of issued stock traded (annualised) 82 135
Price - High R8.02 US$1.031
- Low R4.65 US$0.610
- Close R6.28 US$0.772
FORWARD LOOKING STATEMENT
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 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 and health
I am encouraged by DRDGOLD`s second fatality-free quarter. Blyvooruitzicht Gold
Mining Company Limited ("Blyvoor") as a whole recorded one million fatality-free
shifts on 23 June 2008 and the mine`s No 6 shaft one million fatality free
shifts on 12 May 2008. Sadly, on Saturday, 16 August 2008, Blyvoor employee Aron
Tanduxolo Maqoma, died in a rockfall underground following a seismic event at
the mine`s No 5 Shaft.
Across the operations as a whole, dressing station injuries were at an
unsatisfactory level. While Crown Gold Recoveries (Pty) Limited ("Crown") showed
no improvement during the quarter, Blyvoor and East Rand Proprietary Mines
Limited ("ERPM") recorded 28% and 21% regressions respectively.
In respect of the other key safety indicators - lost time injuries and
reportable injuries - Crown reported improvements, while the performance of both
Blyvoor and ERPM deteriorated.
We are moving ahead with our behaviour-based safety initiative, in response to a
company-wide audit that showed worker behaviour to be the largest cause of
accidents resulting in injury. Training of internal behaviour-based safety
consultants is under way at Blyvoor and implementation of a pilot project is
scheduled for the December quarter. This will lead to a company-wide roll-out.
Occupational health - in particular, prevention of noise-induced hearing loss,
silicosis and radiation exposure - continues to be a major focus. Each of the
operations shows improvement in terms of preventive measures but we have some
way to go to attain a level of uniformity that adequately betters compliance.
Total expenditure for the quarter on environmental issues such as
rehabilitation, dust monitoring and water sampling amounted to R4.5 million
(R3.1 million at Crown, R0.7 million at Blyvoor and R0.7 million at ERPM).
Growing public attention has been directed towards the Wonderfonteinspruit.
DRDGOLD is one of a number of mining companies comprising the Mining Interest
Group, a body formed to interface with other stakeholders on the Wonderfontein
issue - amongst them public interest groups and government departments.
Production
Total gold production from continuing operations for the quarter was 1% higher
at 71 211 oz, reflecting improved performance at both the Blyvoor and Crown
operations, the former in spite of a previously reported illegal one-day work
stoppage. Lower production at the ERPM operation resulted both from a four-day
disruption of operations related to xenophobic violence in communities close to
the mine and to the discontinuation of mining of two unprofitable longwalls.
Gold production for the year declined by 33% to 321 432 oz, primarily the result
of the company`s two-pronged plan: withdrawal from Australasia and restoration
of the South African operations first to stability and then to sustainable
levels of profitable production.
Reserves and resources
DRDGOLD`S attributable mineral resources increased slightly from 54.2 million
ounces ("Moz") in 2007 to 54.7 Moz in 2008, the main contributor being an
additional, attributable 2.2 Moz from the Ergo Joint Venture ("JV").
The company`s attributable ore reserves rose by 25%, from 6.3 Moz in 2007 to 7.9
Moz in 2008, mainly due to a rise in ERPM`s underground and surface reserves
(see below).
Attributable mineral resources from Blyvoor increased by 1% to 20.4 Moz in 2008,
following an exploration programme to further define the operation`s surface
resources. Attributable ore reserves from Blyvoor were 6% lower at 4.8 Moz,
mainly due to depletion.
Attributable mineral resources from ERPM decreased by 5% to 29.0 Moz, a
consequence of the updated evaluation model which uses the latest sampling data
to evaluate ERPM and ERPM Ext 1. Attributable ore reserves from ERPM increased
by 271% to 2.6 Moz. The attributable, underground reserves rose from 0.5 Moz to
1.2 Moz due to the conversion of the ERPM Ext 1 Measured and Indicated Resource
into Proven and Probable Reserves, and the attributable surface reserves from
0.2 Moz to 1.5 Moz due to the inclusion of the Elsburg Tailings Complex, to be
mined by the Ergo JV.
Attributable Mineral Resources from Crown were virtually unchanged at 3.1 Moz,
as were attributable reserves at 0.4 Moz.
Financial
Group revenue from continuing operations for the quarter was slightly lower at
R495.4 million, a consequence mainly of a 2% drop in the average gold price
received to R224 552/kg. After accounting for cash operating costs which were 8%
higher at R383.2 million, cash operating profit was 21% lower at R112.2 million.
An impairment of R69.8 million relating to the discontinued unprofitable
longwalls at ERPM was recorded, and net profit for the quarter was R44.5 million
compared with the previous quarter`s R132.0 million.
Group revenue from continuing operations for the year was 20% higher at R1 843.9
million, reflecting a 29% increase in the average gold price received to R192
143/kg. After accounting for cash operating costs, 14% higher at R1 479.6
million, cash operating profit was 57% higher at R364.3 million. Net profit was
R1 225.1 million compared with the previous year`s loss of R1 165.0 million,
reflecting profit of R1 169.2 million from the disposal of the Australasian
interests.
Management
I would like to thank all Group Executives and employees for their support
throughout a difficult year. My contract as Chief Executive Officer ("CEO")
terminates on 31 December 2008. I am pleased to announce the appointment of Niel
Pretorius as CEO-Designate and an Executive Director of the company and wish him
all the best for himself and the business in 2009.
Looking ahead
Our fourth quarter brought to an end a challenging financial year in which we
were focused on recreating ourselves. From being an embattled gold miner trying
unsuccessfully to make the best of a suite of mismatched assets in two vastly
different geographic regions of the world, we have returned pretty much to our
roots.
We are once again a distinctly South African gold miner doing what we do best -
mining mature, deep-level mines and re-treating surface tailings. Much of our
energy has been directed towards restoring our South African business first to
stability, then to a sustainable level of production, and to the establishment
of a platform for organic growth. Fortuitously, we have been supported in our
efforts by a stronger gold price.
We are now at a point at which we believe optimization of our current operations
and projects, both underground and surface could deliver total production of the
order of 400 000 ounces per annum over time.
Dividends
The directors have today declared a final dividend of 10 South African cents per
ordinary share for the year ended 30 June 2008 which amounts in total R37.7
million. This dividend was declared based on the current high gold price
received and shareholders are advised that future dividends would only be
considered if the gold price remains favourable. In compliance with the
requirements of Strate, given the company`s primary listing on the JSE Limited,
the salient dates for payment of the dividend are as follows:
2008
Last date to trade ordinary shares cum dividend Friday, 3 October
Ordinary shares trade ex dividend Monday, 6 October
Record date Friday, 10 October
Payment date Monday, 13 October
On payment date, dividends due to holders of certificated securities on the
South African share register will either be electronically transferred to
shareholders` bank accounts or, in the absence of suitable mandates, dividend
cheques will be posted to such shareholders.
Dividends in respect of dematerialised shareholdings will be credited to
shareholders` accounts with the relevant CSDP or broker.
To comply with the further requirements of Strate, between Monday, 6 October
2008 and Friday 10 October 2008, both days inclusive, no transfers between the
South African and any other share registers will be permitted and no ordinary
shares pertaining to the South African share register may be dematerialised or
rematerialised.
To holders of American Depositary Shares
Each American Depositary Share (ADS) represents ten ordinary shares
2008
ADSs trade ex dividend on NASDAQ Wednesday, 8 October
Record date Friday, 10 October
Approximate date for currency conversion Friday, 17 October
Approximate payment date of dividend Monday, 27 October
Assuming an exchange rate of R7.92/$1, the dividend payable on an ADS is
equivalent to 1.26 US cents. However, the actual rate of payment will depend on
the exchange rate on the date for currency conversion.
John Sayers
Chief Executive Officer
FINANCIAL INFORMATION
KPMG`s unmodified review report on the condensed 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.
CONDENNSED CONSOLIDATED Quarter Quarter Quarter
Income statement Jun 08 Mar 08 Jun 06
Unreviewed Rm Rm Rm
Continuing operations
Gold and silver revenue 495.4 498.6 381.8
Cash operating costs (383.2) (356.4) (336.7)
Cash operating profit 112.2 142.2 45.1
Administration expenses and
general costs (19.1) (21.3) (20.3)
Share-based payments (5.9) (0.3) (1.6)
Care and maintenance costs (7.6) (2.3) (2.5)
Profit from operations 79.6 118.3 20.7
Retrenchment costs (5.1) - -
Investment income 35.1 27.5 6.6
Finance costs and unwinding of
provisions 4.0 (4.7) 12.0
Net operating profit 113.6 141.1 39.3
Movement in provision for environmental
rehabilitation (16.0) (4.7) (10.7)
Depreciation (11.0) (18.4) (10.8)
Impairments (63.9) - (21.5)
Net loss on financial liabilities
measured at amortised cost (88.5) - (8.6)
Movement in gold process 14.7 (0.1) 2.5
(Loss)/profit on sale of investments (0.9) - 0.1
(Loss)/profit before taxation (52.0) 117.9 (9.7)
Taxation 3.8 (13.6) (0.2)
Deferred taxation 81.6 - -
Profit after taxation 33.4 104.3 (9.9)
Discontinued operations
Loss for the period from discontinued
operations (0.5) (1.3) (66.8)
Profit on sale of discontinued
operations 12.6 30.3 -
Impairment from discontinued operations (1.0) (1.3) (84.9)
Net profit/(loss) for the period 44.5 132.0 (161.6)
Attributable to:
Ordinary shareholders of the company 40.2 104.4 (125.2)
Minority interest 4.3 27.6 (36.4)
44.5 132.0 (161.6)
Headline earnings/(loss) per
share-cents
From continuing operations 19.3 21.8 (1.9)
From total operations 19.3 21.5 (10.0)
Basic profit/(loss) per share-cents
From continuing operations 8.9 21.8 (1.9)
From total operations 10.7 27.7 (34.0)
Calculated on the weighted average
ordinary shares issued of: 376 536 319 376 228 788 368 254 618
Diluted headline earnings/(loss)
per share-cents 19.3 21.5 (10.0)
Diluted basic profit/(loss)
per share-cents 10.7 27.7 (34.0)
Adjusted headline earnings/(loss)
per share-cents(Adjusted for the net
loss on financial liabilities measured
at amortised cost)*
from continuing operations 42.8 21.8 0.4
from total operations 42.8 21.5 (7.7)
(Reviewed) 12 months to 12 months to
30 Jun 08 30 Jun 07
Rm Rm
Continuing operations
Gold and silver revenue 1 843.9 1 534.8
Cash operating costs (1 479.6) (1 302.7)
Cash operating profit 364.3 232.1
Administration expenses and general costs (80.9) (107.0)
Share-based payments (6.6) (4.5)
Care and maintenance costs (15.2) (10.6)
Profit from operations 261.6 110.0
Retrenchment costs (11.3) (0.9)
Investment income 75.7 23.2
Finance costs and unwinding of provisions (13.9) (21.3)
Net operating profit 312.1 111.0
Movement in provision for environmental
rehabilitation (30.2) (20.0)
Depreciation (69.0) (64.0)
Impairments (63.9) (5.9)
Net loss on financial liabilities measured at
amortised cost (89.3) (12.2)
Movement in gold process 15.3 2.9
Profit/(loss) on sale of investments 11.1 (8.0)
Profit before taxation 86.1 3.8
Taxation (13.3) (0.7)
Deferred taxation 81.6 -
Profit after taxation 154.4 3.1
Discontinued operations
Loss for the period from discontinued operations (51.8) (386.9)
Profit on sale of discontinued operations 1 169.2 90.9
Impairment from discontinued operations (46.7) (872.1)
Net profit/(loss) for the period 1 225.1 (1 165.0)
Attributable to:
Ordinary shareholders of the company 994.9 (923.7)
Minority interest 230.2 (241.3)
1 225.1 (1 165.0)
Headline earnings/(loss) per share-cents
From continuing operations 41.1 0.3
From total operations 30.2 (87.1)
Basic profit/(loss) per share-cents
From continuing operations 33.9 (1.3)
From total operations 264.6 (270.9)
Calculated on the weighted average
ordinary shares issued of: 376 023 344 340 928 374
Diluted headline earnings/(loss) per share-cents 30.2 (87.1)
Diluted basic profit/(loss) per share-cents 264.6 (270.9)
Adjusted headline earnings/(loss) per share-cents
(Adjusted for the net loss on financial
liabilities measured at amortised cost)*
From continuing operations 64.9 3.8
From total operations 54.0 (83.5)
*Note: From time to time DRDGOLD may publicly disclose certain "Non-GAAP"
financial measures in the course of its financial presentations, earnings
releases, earnings conference calls and otherwise. The net loss on financial
liabilities measured at amortised cost in the income statement comprises the
expected cash flows of the preference shares issued to Khumo Gold SPV (Pty)
Limited and the DRDGOLD SA Empowerment Trust. These preference shares are re-
measured on an annual basis and based on the expected future cash flows from
DRDGOLD South African Operations (Pty) Ltd.
CONDENSED CONSOLIDATED As at As at As at
Balance Sheet 30 Jun 08 31 Mar 08 30 Jun 07
Rm Rm Rm
Reviewed Unreviewed Reviewed
Assets
Property, plant and equipment 815.6 669.1 649.8
Investments 65.3 57.7 59.7
Environmental rehabilitation
trust funds 110.8 86.6 75.8
Deferred mining and income taxes 81.6 - -
Current assets 1 189.2 1 050.6 1 161.9
Inventories 62.9 51.0 108.7
Trade and other receivables 240.5 245.4 93.4
Financial assets - - 6.0
Cash and cash equivalents 846.1 731.5 106.9
Assets classified as held
for sale 39.7 22.7 846.9
2 262.5 1 864.0 1 947.2
Equity and Liabilities
Equity 1 305.5 1 248.6 143.5
Shareholders equity 1 244.3 1 187.3 142.4
Minority shareholders interest 61.2 61.3 1.1
Long-term liabilities 144.0 49.2 49.2
Post retirement and other employee
benefits 22.7 22.1 26.0
Provision for environmental
rehabilitation 381.3 296.9 282.6
Deferred mining and income taxes - - 104.3
Current liabilities 409.0 247.2 1 341.6
Trade and other liabilities 387.4 247.2 422.1
Current portion of
long-term liabilities 21.6 - 790.3
Liabilities classified as held
for sale - - 129.2
2 262.5 1 864.0 1 947.2
CONDENSED CONSOLIDATED Quarter Quarter Quarter
Statement of changes in equity Jun 08 Mar 08 Jun 07
(Unreviewed) Rm Rm Rm
Balance at the beginning of
the period 1 248.6 1 130.2 239.8
Share capital issued 0.7 1.3 44.9
for acquisition finance and cash - - 44.9
for share options exercised 0.7 1.6 -
for costs - (0.3) -
Increase in share-based payment reserve 5.9 0.3 9.8
Net profit/loss attributed to
ordinary shareholders 40.2 104.4 (125.2)
Net profit/loss attributed to
minority shareholders 4.3 27.6 (36.4)
Increase/(decrease) in minorities 5.2 (37.2) -
Currency translation adjustments
and other 0.6 22.0 10.6
Balance as at the end of the period 1 305.5 1 248.6 143.5
Reconciliation of headline earnings/(loss)
Net profit/(loss) attributable to
ordinary shareholders 40.2 104.4 (125.2)
Adjusted for:
Impairments 63.9 - 21.5
Impairment from discontinued operation 1.0 1.3 84.9
Profit on sale of
discontinued operations (12.6) (30.3) -Profit on
sale of assets
and investments (9.2) - (0.1)
Minority share in headline adjustments(10.5) 5.4 (18.1)
Headline earnings/(loss) 72.8 80.8 (37.0)
Statement of changes in equity 12 months to 12 months to
(Reviewed) 30 Jun 08 30 Jun 07
Rm Rm
Balance at the beginning of the period 143.5 1 015.3
Share capital issued 29.1 307.7
for acquisition finance and cash 28.0 314.5
for share options exercised 2.3 1.0
for costs (1.2) (7.8)
Increase in share-based payment reserve 6.6 12.7
Net profit/(loss) attributed to ordinary
shareholders 994.9 (923.7)
Net profit/(loss) attributed to minority
shareholders 230.2 (241.3)
Increase/(decrease) in minorities (184.1) 18.5
Currency translation adjustments and other 85.3 (45.7)
Balance as at the end of the period 1 305.5 143.5
Reconciliation of headline earnings/(loss)
Net profit/(loss) attributable to
ordinary shareholders 994.9 (923.7)
Adjusted for:
Impairments 63.9 5.9
Impairment from discontinued operation 46.7 872.1
Profit on sale of discontinued operations (1 169.2) (90.9)
(Profit)/loss on sale of investments (21.3) 8.0
Minority share in headline adjustments 198.6 (168.3)
Headline earnings/(loss) 113.6 (296.9)
CONDENSED CONSOLIDATED Quarter Quarter Quarter
Cash Flow Statement Jun 08 Mar 08 Jun 07
(Unreviewed) Rm Rm Rm
Net cash in/(out)flow from operating
activities 238.1 (7.1) 108.7
Net cash out from investing activities(150.5) (36.0) (61.0)
Net cash in/(out)flow from
financing activities 26.0 1.6 (3.7)
Increase/(decrease) in cash and cash
equivalents 113.6 (41.5) 44.0
Translation adjustment 1.0 23.8 (61.2)
Opening cash and cash equivalents 731.5 749.2 126.5
Closing cash and cash equivalents 846.1 731.5 109.3
Cash classified as assets held for
Sale included in the closing balance - - 2.4
Reconciliation of net cash in/(out)flow
from operations
Net operating profit 113.6 141.1 39.3
Net operating loss from discontinued
operation (1.8) (3.1) (60.5)
111.8 138.0 (21.2)
Adjusted for:
Interest provision (15.5) - -
Amortisation of convertible cost - - 0.8
Financial instruments - - 2.8
Unrealised foreign exchange gain (1.7) (3.3) (6.1)
Growth in Environmental Trust funds (2.5) (3.8) (2.8)
Other non cash items (2.9) 6.8 3.3
Interest paid (0.1) (0.2) 0.5
Taxation paid (11.8) - (13.4)
Working capital changes 160.8 (144.6) 144.8
Net cash in/(out) from operating
activities 238.1 (7.1) 108.7
CONDENSED CONSOLIDATED 12 months to 12 months to
Cash Flow Statement 30 Jun 08 30 Jun 07
(Reviewed) Rm Rm
Net cash (out)/in flow from operating activities 24.5 61.1
Net cash in/(out)flow from investing activities 1 811.4 (312.1)
Net cash out flow from financing activities (1 083.7) (55.2)
Increase/(decrease) in cash and cash equivalents 752.2 (306.2)
Translation adjustment (15.4) (73.5)
Opening cash and cash equivalents 109.3 489.0
Closing cash and cash equivalents 846.1 109.3
Cash classified as assets held for sale included
in the closing balance - 2.4
Reconciliation of net cash in/(out)flow from operations
Net operating profit 312.1 111.0
Net operating loss from discontinued operation (111.8) (233.4)
200.3 (122.4)
Adjusted for:
Interest provision (15.5) -
Amortisation of convertible cost - 4.3
Financial instruments 1.2 51.7
Unrealised foreign exchange loss/(gain) 37.3 (7.4)
Growth in Environmental Trust funds (8.5) (8.1)
Other non cash items 49.0 44.8
Interest paid (39.7) (76.2)
Taxation paid (40.8) (34.3)
Working capital changes (158.8) 208.7
Net cash(out)/in flow from operating activities 24.5 61.1
NOTES REGARDING FINANCIAL INFORMATION
Summary of significant accounting policies
Basis of preparation
The condensed consolidated financial statements in this report have been
prepared on the historical cost basis except for certain financial instruments
which are stated at fair value. The group`s accounting policies used in the
preparation of these financial statements are consistent with those used in the
annual financial statements for the year ended 30 June 2007, except for
accounting policy changes made after the date of the annual financial
statements.
The financial statements have been prepared in accordance with IAS34, JSE
Listings Requirements and in the manner required by the South African Companies
Act, 1973 for the preparation of financial information of the group for the
quarter and year ended 30 June 2008.
Change in accounting policy
For the year ended 30 June 2008 the group changed its presentation in respect of
metals on consignment. Metals on consignment previously classified as cash and
cash equivalents have been reclassified as trade and other receivables. The
change was applied retrospectively and had no effect on current or previous
results of the group.
Implementation of new accounting policy
IFRIC 11 (AC444) IFRS 2-Group and Treasury Share Transactions (Updated to
January 2008)
The company adopted Group and Treasury share transactions retrospectively as at
30 June 2008, which requires management to allocate share based transactions
recognised in the parent to entities that have supplied goods or services. The
redistribution increased the loss attributable to the minority interest by R0.7
million for the year ended 30 June 2007 and had no other effect on current or
previous results.
KEY OPERATING AND FINANCIAL RESULTS (Unreviewed)
SOUTH AFRICAN OPERATIONS
Blyvoor Quarter Quarter % Quarter
Jun 08 Mar 08 Change Jun 07
Ore milled
Underground t`000 174 155 12 184
Surface t`000 980 946 4 932
Total t`000 1 154 1 101 5 1 116
Yield
Underground g/t 4.44 4.48 (1) 4.74
Surface g/t 0.31 0.33 (6) 0.34
Total g/t 0.93 0.91 2 1.07
Gold produced
Underground oz 24 852 22 312 11 28 036
kg 773 694 11 872
Surface oz 9 709 10 031 (3) 10 255
kg 302 312 (3) 319
Total oz 34 561 32 343 7 38 291
kg 1 075 1 006 7 1 191
Cash operating costs
Underground US$/oz 816 814 - 665
ZAR/kg 204 344 198 768 (3) 152 290
ZAR/t 908 890 (2) 722
Surface US$/oz 379 350 (8) 283
ZAR/kg 94 927 85 026 (12) 64 627
ZAR/t 29 28 (4) 22
Total US$/oz 694 670 (4) 563
ZAR/kg 173 606 163 492 (6) 128 810
ZAR/t 162 149 (9) 137
Cash operating profit US$ m 7.0 8.7 (20) 3.9
ZAR m 53.1 63.7 (17) 28.3
Capital expenditure (net)US$ m 3.7 2.1 (76) 2.5
ZAR m 28.6 15.5 (85) 17.7
12 months to 12 months to
30 Jun 08 30 Jun 07
Ore milled
Underground t`000 687 690
Surface t`000 3 719 3 694
Total t`000 4 406 4 384
Yield
Underground g/t 4.70 4.98
Surface g/t 0.31 0.34
Total g/t 1.00 1.07
Gold produced
Underground oz 103 813 110 471
kg 3 229 3 436
Surface oz 37 359 40 798
kg 1 162 1 269
Total oz 141 172 151 269
kg 4 391 4 705
Cash operating costs
Underground US$/oz 772 642
ZAR/kg 181 518 149 114
ZAR/t 853 743
Surface US$/oz 387 287
ZAR/kg 90 971 66 693
ZAR/t 28 23
Total US$/oz 670 547
ZAR/kg 157 556 126 884
ZAR/t 157 136
Cash operating profit US$ m 21.4 13.5
ZAR m 156.4 97.6
Capital expenditure (net)US$ m 10.2 9.5
ZAR m 74.8 68.5
Total gold production increased by 7% to 34 561 oz, in spite of a previously
reported one-day illegal strike during May. The quarter under review was,
however, free from both of the Eskom-related power outages and the summer rain
disruptions to surface retreatment operations that characterized the previous
quarter. Total throughput rose by 5% to 1 154 000 t and the total average yield
by 2% to 0.93 g/t.
Underground gold production was 11% higher at 24 852 oz, reflecting a 12%
increase in throughput to 174 000 t. The average underground grade was 1% lower
at 4.44 g/t. A new, R2.5 million ore pass system between 35 and 38 levels,
splitting reef and waste, is expected to lead to an improvement in the average
underground grade from the September quarter.
Surface gold production was 3% lower at 9 709 oz in spite of a 4% increase in
throughput to 980 000 t. The average surface grade was 6% down at 0.31 g/t due
to lower levels of higher grade waste rock material in the mix.
Total cash operating costs were 6% higher at R173 606/kg. Underground cash
operating costs were 3% higher at R204 344/kg, while lower surface gold
production drove surface cash operating costs 12% higher to R94 927/kg.
Total cash operating profit was 17% lower at R53.1 million, a consequence of
higher total cash operating costs and of a 2% drop in the average gold price
received to R224 552/kg.
Capital expenditure for the quarter was 85% higher at R28.6 million, the main
components being the No 5 Shaft Way Ahead Project ("WAP"), the new ore pass
system and improvements to the mine`s underground compressed air network.
While some delay was experienced during drilling of the second WAP raise
borehole, first production from the project remains on track for the September
quarter, rising to 3 100 oz in the fourth quarter of the new financial year.
Work on the 15/29 Incline Project at No 6 Shaft continues on schedule, with
first production expected towards the end of the new financial year.
The exploration drilling programme to evaluate the south-west down dip extension
of the orebody south of the Boulder Dyke began during the quarter and some 617m
of drilling was completed, most of it confined to structural and cover drilling.
As development advances, prospecting will be undertaken to locate and define
payshoots on both reef horizons. If encouraging results are obtained, various
mining options will be investigated to exploit the orebody, including the
possibility of a trackless decline.
During the quarter an additional 12 holes were drilled on the Blyvoor No 7
slimes dam to confirm grades. Three holes were submitted for leach test work
which indicated extraction efficiencies ranging from 27% to 57% (averaging 40%).
The borehole assay results as at 30 June 2008 will be re-evaluated and a
feasibility study conducted to determine the viability of the dam.
Crown Quarter Quarter % Quarter
Jun 08 Mar 08 Change Jun 07
Ore milled t`000 2 031 1 919 6 2 107
Yield g/t 0.33 0.34 (3) 0.33
Gold produced oz 21 573 20 673 4 22 667
kg 671 643 4 705
Cash operating costs US$/oz 529 557 5 507
ZAR/kg 133 159 135 855 2 116 026
ZAR/t 44 46 4 39
Cash operating profit US$ m 8.0 8.3 (4) 3.6
ZAR m 61.4 60.4 2 25.6
Capital expenditure (net)US$ m 4.9 0.4 (1 125) 1.5
ZAR m 35.9 2.5 (1 336) 10.1
12 months to 12 months to
30 Jun 08 30 Jun 07
Ore milled t`000 8 235 8 405
Yield g/t 0.33 0.38
Gold produced oz 87 354 103 011
kg 2 717 3 204
Cash operating costs US$/oz 553 450
ZAR/kg 129 908 104 442
ZAR/t 43 40
Cash operating profit US$ m 24.0 19.1
ZAR m 175.7 138.2
Capital expenditure (net)US$ m 5.8 4.2
ZAR m 42.1 30.0
Gold production was 4% higher at 21 573 oz, a 6% increase in throughput to 2 031
000 t offsetting the impact of a 3% decline in grade to 0.33 g/t. Increased
volumes were a consequence of the drier, winter months while lower grade
reflects ever-diminishing reserves of higher grade material available.
Cash operating costs were 2% lower at R133 159/kg and cash operating profit was
2% higher at R61.4 million, both a result of higher production.
Capital expenditure rose substantially, from R2.5 million to R35.9 million,
reflecting preparations for the mining of the Topstar dump, south of
Johannesburg`s Central Business District.
ERPM Quarter Quarter % Quarter
Jun 08 Mar 08 Change Jun 07
Ore milled
Underground t`000 68 78 (13) 68
Surface t`000 358 491 (27) 500
Total t`000 426 569 (25) 568
Yield
Underground g/t 5.00 4.68 7 5.68
Surface g/t 0.36 0.36 - 0.44
Total g/t 1.10 0.95 16 1.08
Gold produced
Underground oz 10 930 11 735 (7) 12 410
kg 340 365 (7) 386
Surface oz 4 147 5 627 (26) 7 137
kg 129 175 (26) 222
Total oz 15 077 17 362 (13) 19 547
kg 469 540 (13) 608
Cash operating costs
Underground US$/oz 966 967 - 840
ZAR/kg 243 865 235 250 (4) 192 358
ZAR/t 1 219 1 101 (11) 1 092
Surface US$/oz 750 427 (76) 535
ZAR/kg 189 000 106 789 (77) 122 599
ZAR/t 68 38 (79) 55
Total US$/oz 907 792 (15) 728
ZAR/kg 228 774 193 619 (18) 166 887
ZAR/t 252 184 (37) 179
Cash operating profit/(loss)
US$ m (0.4) 2.4 (117) (1.2)
ZAR m (2.3) 18.0 (113) (8.8)
Capital expenditure (net)US$ m 1.2 0.7 (71) 2.0
ZAR m 9.1 5.8 (57) 14.5
12 months to 12 months to
30 Jun 08 30 Jun 07
Ore milled
Underground t`000 303 269
Surface t`000 1 859 1 753
Total t`000 2 162 2 022
Yield
Underground g/t 5.83 6.71
Surface g/t 0.38 0.39
Total g/t 1.14 1.23
Gold produced
Underground oz 56 812 58 063
kg 1 767 1 806
Surface oz 22 667 22 153
kg 705 689
Total oz 79 479 80 216
kg 2 472 2 495
Cash operating costs
Underground US$/oz 812 654
ZAR/kg 190 938 151 816
ZAR/t 1 113 1 019
Surface US$/oz 588 606
ZAR/kg 138 250 140 719
ZAR/t 52 55
Total US$/oz 748 641
ZAR/kg 175 912 148 751
ZAR/t 201 184
Cash operating profit/(loss)
US$ m 4.4 (0.5)
ZAR m 32.2 (3.8)
Capital expenditure (net)US$ m 4.1 5.6
ZAR m 30.1 40.6
The previously reported restructuring of ERPM`s underground operations to
reverse a worsening pattern of unprofitable mining was completed during the
quarter. A retrenchment agreement was reached with representative unions and
associations without recourse to industrial action, and successful application
of various avoidance measures contained the number of employees retrenched to
239.
Total gold production for the quarter was 13% lower at 15 077 oz, refecting both
the negative impact on operations over a period of four days of xenophobic
violence in communities close to the mine and to the cessation of mining of the
unprofitable 73 and 74 longwalls. While total throughput was 25% lower at 426
000 t, the average grade was 16% higher at 1.10 g/t.
Underground gold production declined by 7% to 10 930 oz due to a 13% drop in
underground throughput to 68 000 t. The average undergound grade, however,
improved by 7% to 5.0 g/t, a consequence of eliminating the unprofitable
longwalls.
Surface gold production declined by 26% to 4 147 oz. While the average surface
grade was steady at 0.36 g/t, throughput dropped by 27% to 358 000 t due to the
unscheduled maintenance of the No 2 mill foundation at the Knights plant, repair
of which was completed within six weeks. Pro-active refurbishment of the No 3
mill, currently under way, is expected to impact negatively on production in the
September quarter.
Total cash operating costs increased by 18% to R228 774/kg. While underground
cash operating costs were up 4% to R243 865/kg, surface cash operating costs
rose by 79% to R189 000/kg. A cash operating loss of R2.3 million was recorded,
compared with the previous quarter`s profit of R18 million.
Capital expenditure was 57% higher at R9.1 million, the major proportion of
which was directed towards completion of the Far East Vertical Shaft plugging
project.
A concept study to determine how best to access the ERPM Ext 1 ore body was
completed during the quarter. This favours development of a new `pay-as-you-go`
decline that circumvents the existing decline and utilises technology proven to
be both safer and more reliable. A feasibility study has been approved and is
scheduled for completion by the end of calendar year 2008.
Discontinued operations -Emperor Mines Limited
Tolukuma Quarter Quarter % Quarter
Jun 08 Mar 08 Change Jun 07
Ore milled t`000 - - - 49
Yield g/t - - - 6.71
Gold produced oz - - - 10 561
kg - - - 329
Cash operating costs US$/oz - - - 906
ZAR/kg - - - 206 775
ZAR/t - - - 1 388
Cash operating loss US$ m - - - (2.4)
ZAR m - - - (17.3)
Capital expenditure (net)US$ m - - - 1.6
ZAR m - - - 11.0
12 months to 12 months to
30 Jun 08 30 Jun 07
Ore milled t`000 56 185
Yield g/t 7.45 7.43
Gold produced oz 13 427 44 181
kg 417 1 374
Cash operating costs US$/oz 1 098 868
ZAR/kg 248 751 201 582
ZAR/t 1 852 1 497
Cash operating loss US$ m (2.6) (7.3)
ZAR m (18.0) (52.5)
Capital expenditure (net)US$ m 2.2 6.5
ZAR m 15.3 46.6
Porgera Quarter Quarter % Quarter
(20% of the Joint Venture) Jun 08 Mar 08 Change Jun 07
Ore milled t`000 - - - -
Yield g/t - - - -
Gold produced oz - - - -
kg - - - -
Cash operating costs US$/oz - - - -
ZAR/kg - - - -
ZAR/t - - - -
Cash operating profit US$ m - - - 2.5
ZAR m - - - 16.2
Capital expenditure (net)US$ m - - - 0.7
ZAR m - - - 4.4
12 months to 12 month to
30 Jun 08 30 Jun 07
Ore milled t`000 - 714
Yield g/t - 3.12
Gold produced oz - 71 570
kg - 2 225
Cash operating costs US$/oz - 450
ZAR/kg - 105 063
ZAR/t - 327
Cash operating profit US$ m - 13.2
ZAR m - 93.8
Capital expenditure (net)US$ m - 8.3
ZAR m - 59.6
Vatukoula Quarter Quarter % Quarter
Jun 08 Mar 08 Change Jun 07
Ore milled t`000 - - - -
Yield g/t - - - -
Gold produced oz - - - -
kg - - - -
Cash operating cost US$/oz - - - -
ZAR/kg - - - -
ZAR/t - - - -
Cash operating profit/(loss)
US$ m - - - -
ZAR m - - - -
Capital expenditure(net) US$ m - - - -
ZAR m - - - -
12 months to 12 months to
30 Jun 08 30 Jun 07
Ore milled t`000 - 117
Yield g/t - 7.15
Gold produced oz - 26 910
kg - 836
Cash operating costs US$/oz - 795
ZAR/kg - 189 986
ZAR/t - 1 358
Cash operating loss US$ m - (4.5)
ZAR m - (36.9)
Capital expenditure (net)US$ m - 9.2
ZAR m - 66.2
CASH OPERATING COSTS RECONCILIATION
SOUTH AFRICAN OPERATIONS (R000 unless otherwise stated)
Crown ERPM Blyvoor Total
Total cash costs
Jun 08 Qtr 95 645 120 576 177 460 393 681
Mar 08 Qtr 93 258 111 616 170 595 375 469
12 months to Jun 08 378 479 469 344 699 069 1 546 892
Movement in gold in process
Jun 08 Qtr (700) 741 14 607 14 648
Mar 08 Qtr 945 (373) (606) (34)
12 months to Jun 08 1 354 (484) 14 375 15 245
Less: Exploration, production
taxes, rehabilitation and other
Jun 08 Qtr (1 254) 3 484 842 3 072
Mar 08 Qtr 3 369 2 266 1 515 7 150
12 months to Jun 08 9 277 10 856 5 452 25 585
Less: Retrenchment costs
Jun 08 Qtr - 5 162 - 5 162
Mar 08 Qtr - - - -
12 months to Jun 08 - 5 528 - 5 528
Less: Corporate and general
administration costs
Jun 08 Qtr 6 849 5 376 4 599 16 824
Mar 08 Qtr 3 479 4 423 4 001 11 903
12 months to Jun 08 17 595 17 622 16 163 51 380
Cash operating costs
Jun 08 Qtr 89 350 107 295 186 626 383 271
Mar 08 Qtr 87 355 104 554 164 473 356 382
12 months to Jun 08 352 961 434 854 691 829 1 479 644
Gold produced (kg)
Jun 08 Qtr 671 469 1 075 2 215
Mar 08 Qtr 643 540 1 006 2 189
12 months to Jun 08 2 717 2 472 4 391 9 580
Cash operating costs (R/kg)
Jun 08 Qtr 133 159 228 774 173 606 173 034
Mar 08 Qtr 135 855 193 619 163 492 162 806
12 months to Jun 08 129 908 175 912 157 556 154 451
Cash operating costs (US$/oz)
Jun 08 Qtr 529 907 694 689
Mar 08 Qtr 557 792 670 667
12 months to Jun 08 553 748 670 657
DIRECTORS - (*British)(**Australian)(***American)
Executive:
JWC Sayers (Chief Executive Officer)
DJ Pretorius (Chief Executive Officer-Designate)
CC Barnes (Chief Financial Officer)
Non-executives:
J Turk ***
Independent non-executives:
DJM Blackmur** (Senior Non-Executive Director)
GC Campbell*(Non-Executive Chairman)
RP Hume
EJ Jeneker
Company Secretary:
TJ Gwebu
Sponsor:
QuestCo Sponsors (Pty) Limited
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 August 2008
Date: 21/08/2008 08:00:01 Produced by the JSE SENS Department.
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