| Thu 23 Oct 2008, 8:00 | | DRD - DRDGOLD - Report to shareholders for the first quarter ended 30 September |
|
DRD
DRDD
DRD - DRDGOLD - Report to shareholders for the first quarter ended 30 September
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 FIRST QUARTER ENDED 30 SEPTEMBER 2008
GROUP RESULTS
- Headline earnings per share of 10.5 cents
- Acquisition of a further 15% interest in the Elsburg JV
- Commissioning of the first CIL circuit at ERGO`s plant on track to commence in
December quarter
- Commissioning of Top Star dump on track to commence in December quarter
- Way Ahead Project production on track to commence in December quarter
KEY FEATURES
KEY RESULTS SUMMARY
GROUP Quarter Quarter % Quarter
Sep 08 Jun 08 Change Sep 07
Gold production
Continuing operations oz 70 861 71 211 - 89 157
kg 2 204 2 215 - 2 773
Discontinued operations oz - - - 10 033
kg - - - 311
Group oz 70 861 71 211 - 99 190
kg 2 204 2 215 - 3 084
Cash operating costs
Continuing operations US$/oz 755 689 (10) 584
ZAR/kg 188 967 173 034 (9) 133 673
Discontinued operations US$/oz - - - 1 017
ZAR/kg - - - 233 707
Group US$/oz 755 689 (10) 628
ZAR/kg 188 967 173 034 (9) 143 761
Gold price received US$/oz 864 893 (3) 693
ZAR/kg 216 297 224 552 (4) 158 598
Capital expenditure US$ million 9.1 20.0 55 5.1
ZAR million 70.2 149.8 53 36.5
Average exchange rate ZAR/US$ 7.79 7.82 - 7.12
STOCK
ISSUED CAPITAL
376 577 088 ordinary no par value shares
5 000 000 cumulative preference shares
392 507 207 total ordinary no par value shares issued and committed
STOCK TRADED JSE NASDAQ
Avg. volume for the quarter per day (000) 956 1 787
% of issued stock traded (annualised) 66 124
Price - High R6.40 US$0.803
- Low R3.37 U$S0.396
- Close R3.75 U$S0.443
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 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 to the occurrence of unanticipated events.
OVERVIEW
Dear shareholder
Safety, health and environment
With deep regret I must report the deaths of four employees in work-related
incidents during this quarter. This marks a serious and bitterly disappointing
reversal to our track record of two successive fatality-free quarters.
At Blyvooruitzicht Gold Mining Company Limited ("Blyvoor"), rock drill
operators, Aron Maqoma and Velelo Mshuwywa, died in rockfalls following seismic
events, the former on 16 August and the latter on 4 September.
At East Rand Proprietary Mines Limited ("ERPM"), timberman Pieter Jonker and
shaft assistant Fernando Vate were asphyxiated in a shaft conveyance on 19
September while on their way to conduct routine water level measurements
underground at the mine`s South West Vertical ("SWV") shaft.
Performance in respect of the other key safety indicators was mixed. ERPM and
Crown Gold Recoveries (Pty) Limited ("Crown") reported improvements in their
dressing station injury rates while Blyvoor reported a 13% regression. ERPM and
Blyvoor reported improvements in their lost time injury frequency rates, but
Crown`s performance remained unchanged. Blyvoor reported a slight improvement in
its reportable injury frequency rate while ERPM and Crown both reported
substantial regressions.
An analysis of accident agencies, or causes, during the quarter showed that the
two largest were fires (22%) and non-seismicity related falls of ground. These,
and the other 28 agencies identified, are all under investigation in order to
identify and implement more stringent preventative measures.
Preparations continued during the quarter for the roll-out of a company-wide
behaviour-based safety initiative during December 2008. The first phase of
internal consultant training has been completed and the second phase is
scheduled for completion by the end of October 2008.
Occupational hygiene came under the spotlight during the quarter. A company-
level occupational hygiene post has been created and filled internally and
training of relevant personnel throughout the operations will be conducted. On
completion of a baseline risk assessment, the company`s Code of Practice will be
revised and implemented.
The company spent a total of R7.6 million on environmental issues during the
quarter - R1.3 million at Blyvoor, R0.8 million at ERPM and R5.5 million at
Crown. At Blyvoor, the largest cost factors were slimes clean-ups,
rehabilitation and consultants` fees; at ERPM the contribution towards the
operation`s environmental rehabilitation trust fund; and at Crown, site
rehabilitation and vegetation.
As discussed in the previous letter to shareholders with regard to the
Wonderfonteinspruit issue, the company continues as an active member of the
Mining Interest Group, interfacing with interested and affected parties.
Corporate
On 6 October 2008, we announced the cessation of pumping from ERPM`s SWV shaft,
following the tragic events of 19 September 2008. We stated at the time that we
would investigate, over the following two weeks, the effect of this withdrawal
on the rest of ERPM`s operations.
We have established that the rising water level of the Central Witwatersrand
Basin will, within the next two to three weeks, start to exert unsustainable
pressure on the pumping capacity of ERPM`s sole production shaft, Far East
Vertical ("FEV") shaft. Pumps from this shaft displace water resulting from 2
100 tons of ice transported underground from surface daily to cool the shaft`s
underground workings through a series of underground plugs into the Central
Witwatersrand Basin against an ever rising head.
Without being able to continue to supply ice to the underground workings, we
will be unable to maintain underground temperatures to within regulated limits,
and may have no other option for the time being than to suspend drilling and
blasting operations. We will have to investigate what possibilities there may be
to resume drilling and blasting at a later stage but it would seem that the
necessary upgrade to FEV Shaft`s pumping capability could be both costly and
lengthy.
We are currently in discussions with labour, surrounding mines and the relevant
government departments to consider these circumstances and how to best manage
its consequences.
During the quarter, we took forward our surface retreatment ambitions with the
announcement of our acquisition from Mintails South Africa (Pty) Limited of a
further 15% interest in the Elsburg Gold Mining Joint Venture ("Elsburg JV"),
taking to 65% our interest in this pivotal component of the first phase of the
Ergo Joint Venture ("Ergo JV"). We have, in addition, a conditional option to
acquire a further 11% in the Elsburg JV.
Construction of the first phase of the Ergo JV has progressed extremely well.
Commissioning of the first carbon in leach circuit at the Brakpan plant will
begin during the December quarter, with production from the Benoni Tailings Dam
ramping up to 600 000 tons per month until April next year, and then to 1.2
million tons per month from the Elsburg Tailings Complex thereafter.
Production
Total gold production for the quarter was virtually unchanged at 70 861 oz, an
11% increase in production at Crown offsetting the impact of production declines
of 7% and 2% at Blyvoor and ERPM respectively.
At Blyvoor, lower production resulted mainly from the loss of 15 production days
due to Section 54 closures imposed by the Department of Minerals and Energy and
days of mourning called by the National Union of Mineworkers - these following
the two fatalities detailed under Safety, Health and Environment above.
At ERPM, lower surface gold production, a result of a decline in the average
surface yield, was the primary contributor to lower total gold production.
Financial
Total revenue was 4% lower at R476.7 million, reflecting a 4% decline in the
average gold price received to R216 297/kg. After accounting for cash operating
costs, which were 9% higher at R416.5 million, operating profit was 55% lower at
R57.2 million. An impairment of R47.6 million relating to the restructuring of
ERPM`s underground operations was recorded, income tax of R15.6 million paid and
a net loss of R8.8 million recorded compared with the previous quarter`s net
profit of R44.5 million.
Looking ahead
A range of events in the quarter under review caused your company`s board and
senior management to engage in some serious introspection. At a macro level, of
course, the turmoil brewing in global economies for months has bubbled to the
surface. While this appears to have been good for gold so far, time will tell
whether jittery investors flock to the metal as a safe haven with the same, or
greater, alacrity as in the past. The South African economy, relatively
speaking, has borne up remarkably well thus far to the global furore, but we are
facing some political uncertainty.
Our introspection, prompted by these events, indicated clearly to us that this
is no time for `heroics` in a business such as ours; indeed, it is a time for
careful consideration of all of the dynamics - those which are in our power to
manage as well as those that are not - and to plan a rational and economical
course ahead that will deliver positive results and value-add.
We envisage such a course for the next 12 months, which will have the following
three focus areas:
- risk management;
- cost control; and
- margin management.
We expect our actions in respect of ERPM, the Elsburg JV and the Ergo JV to
impact positively and quickly on costs and returns. Moving ahead, we envisage
further steps to achieve a lower-risk, lower-cost, better return profile,
gaining as much leverage as we can from our long-established track record in
surface retreatment.
NOTE REGARDING FINANCIAL INFORMATION
The condensed consolidated financial statements below have been prepared in
accordance with International Financial Reporting Standards ("IFRS") and IAS 34,
which is consistent with the accounting policies used in the audited annual
financial statements for the year ended 30 June 2008.
CONDENSED CONSOLIDATED Quarter Quarter Quarter
Statement of comprehensive income Sep 08 Jun 08 Sep 07
R m R m R m
Unaudited Audited Unaudited
Continuing operations
Gold and silver revenue 476.7 495.4 433.0
Net operating costs (419.5) (368.5) (371.3)
Cash operating costs (416.5) (383.2) (370.7)
Movement in gold in process (3.0) 14.7 (0.6)
Operating profit 57.2 126.9 61.7
Depreciation (17.0) (11.0) (19.7)
Movement in provision for
environmental rehabilitation (12.1) (16.0) (4.7)
Retrenchment costs (0.9) (5.1) (1.1)
Gross profit from operating activities 27.2 94.8 36.2
Impairments (47.6) (63.9) -
Administration expenses and
general costs (6.1) (19.1) (22.8)
Share-based payments (1.1) (5.9) 0.5
Care and maintenance costs (2.8) (7.6) (2.5)
Financial liabilities measured
at amortised cost 7.3 (88.5) -
(Loss)/profit on sale of assets
and investments (1.6) (0.9) 12.0
Finance income 32.9 35.1 (2.3)
Finance expenses and unwinding
of provisions (2.7) 4.0 (8.4)
Profit/(loss) before taxation 5.5 (52.0) 12.7
Income tax (15.6) 3.8 -
Deferred tax 1.3 81.6 -
(Loss)/profit after taxation (8.8) 33.4 12.7
Discontinued operations
Loss for the period
from discontinued operations - (0.5) (56.6)
Profit on sale of assets and investments - 12.6 1 008.0
Impairment from discontinued operations - (1.0) -
Net (loss)/profit for the period (8.8) 44.5 964.1
Attributable to:
Ordinary shareholders of the company 3.1 40.2 757.1
Minority interest (11.9) 4.3 207.0
(8.8) 44.5 964.1
Headline earnings/(loss) per share-cents
from continuing operations 10.5 19.3 0.2
from total operations 10.5 19.3 (11.7)
Basic earning per share-cents
from continuing operations 0.8 8.9 3.4
from total operations 0.8 10.7 201.8
Diluted headline earning/(loss)
per share-cents 10.5 19.3 (11.7)
Diluted basic earnings per share-cents 0.8 10.7 201.8
Calculated on the weighted average
ordinary shares issued of: 376 573 381 376 536 319 375 196 329
CONDENSED CONSOLIDATED As at As at As at
Statement of financial position 30 Sep 08 30 Jun 08 30 Sep 07
Rm Rm Rm
Unaudited Audited Unaudited
Property, plant and equipment 821.2 815.6 627.0
Non-current investments and
Other assets 65.3 65.3 59.8
Environmental rehabilitation
Trusts funds 116.0 110.8 79.2
Deferred tax 82.8 81.6 -
Current assets 1 036.6 1 189.2 1 177.0
Inventories 67.4 62.9 58.2
Trade and other receivables 145.2 240.5 58.9
Cash and cash equivalents 809.0 846.1 425.4
Assets classified as held for sale 15.0 39.7 634.5
2 121.9 2 262.5 1 943.0
Equity and Liabilities
Equity 1 240.7 1 305.5 1 251.8
Shareholders equity 1 191.4 1 244.3 1 073.8
Minority shareholders interest 49.3 61.2 178.0
Long-term liabilities 120.8 125.7 49.2
Post retirement and other
employee benefits 23.4 22.7 20.9
Provision for environmental
rehabilitation 394.9 381.3 279.8
Current liabilities 342.1 427.3 341.3
Trade and other payables 270.3 387.4 250.8
Short term liabilities 34.2 39.9 -
Dividends to ordinary shareholders 37.6 - -
Liabilities classified
as held for sale - - 90.5
2 121.9 2262.5 1943.0
CONDENSED Quarter Quarter Quarter
Statement of changes in equity Sep 08 Jun 08 Sep 07
Rm Rm Rm
Unaudited Audited Unaudited
Balance at the beginning of
the period 1 305.5 1 248.6 143.5
Share capital issued - 0.7 27.1
for acquisition finance and cash - - 28.0
for share options exercised - 0.7 -
for costs - - (0.9)
Increase/(decrease) in
share-based payment reserve 1.1 5.9 (0.5)
Net profit attributed to
ordinary shareholders 3.1 40.2 757.1
Net (loss)/profit attributed to
minority shareholders (11.9) 4.3 207.0
Dividend declared (37.6) - -
Increase in minorities - 5.2 -
Currency translation adjustments
and other (19.5) 0.6 117.6
Balance as at the end of the
period 1 240.7 1 305.5 1 251.8
Reconciliation of headline profit/(loss)
Net profit 3.1 40.2 757.1
Adjusted for:
Impairments 47.6 63.9 -
Impairment from discontinued
operation - 1.0 -
Profit on sale of discontinued
operations - (12.6) (1 008.0)
Loss/(profit) on sale of
assets and investments 1.2 (9.2) (12.0)
Minority share of headline
adjustments (12.4) (10.5) 219.0
Headline earnings/(loss) 39.5 72.8 (43.9)
CONDENSED CONSOLIDATED Quarter Quarter Quarter
Statement of cash flows Sep 08 Jun 08 Sep 07
Rm Rm Rm
Unaudited Reviewed Unaudited
Net cash in/(out) flow
from operations 25.3 238.1 (309.7)
Net cash (out)/in flow
from investing activities (46.4) (150.5) 1 870.4
Net cash (out)/in flow from
financing activities (2.6) 26.0 (1 059.6)
(Decrease)/increase in cash
and cash equivalents (23.7) 113.6 501.1
Translation adjustment (13.4) 1.0 258.5
Opening cash and cash equivalents 846.1 731.5 137.7
Closing cash and cash equivalents 809.0 846.1 897.3
Cash classified as assets held for
sale included in the closing balance - - 471.9
Reconciliation of net
cash outflow from operations
Profit/(loss) before tax 5.5 (52.0) 12.7
Net operating loss from
discontinued operations - (0.5) (56.6)
5.5 (52.5) (43.9)
Adjusted for:
Movement in gold process 3.0 (14.7) 0.6
Depreciation and impairments 64.6 74.9 19.7
Movement in provision for
Environmental rehabilitation 12.1 16.0 4.7
Share-based payments 1.1 5.9 (0.5)
(Profit)/loss on derivative financial
instruments (7.3) 88.5 -
Loss/(profit) on sale of assets
and investments 1.6 0.9 (12.0)
Finance expenses and unwinding of
provisions (1.6) (7.0) 3.9
Growth in environmental trust funds (3.5) (2.5) (1.8)
Other non cash items 0.9 (20.4) 17.5
Taxation paid - (11.8) (23.3)
Working capital changes (51.1) 160.8 (274.6)
Net cash in/(out)flow
from operations 25.3 238.1 (309.7)
KEY OPERATING AND FINANCIAL RESULTS (Unaudited)
CONTINUING OPERATIONS
Blyvoor Quarter Quarter % Quarter
Sep 08 Jun 08 Change Sep 07
Ore milled
Underground t`000 154 174 (11) 194
Surface t`000 884 980 (10) 856
Total t`000 1 038 1 154 (10) 1 050
Yield
Underground g/t 4.65 4.44 5 5.03
Surface g/t 0.32 0.31 3 0.31
Total g/t 0.96 0.93 3 1.18
Gold produced
Underground oz 23 020 24 852 (7) 31 347
kg 716 773 (7) 975
Surface oz 9 034 9 709 (7) 8 488
kg 281 302 (7) 264
Total oz 32 054 34 561 (7) 39 835
kg 997 1 075 (7) 1 239
Cash operating costs
Underground US$/oz 934 816 (15) 667
ZAR/kg 233 929 204 344 (14) 152 673
ZAR/t 1 088 908 (20) 767
Surface US$/oz 451 379 (19) 406
ZAR/kg 112 836 94 927 (19) 92 992
ZAR/t 36 29 (24) 29
Total US$/oz 798 694 (15) 611
ZAR/kg 199 799 173 606 (15) 139 956
ZAR/t 192 162 (19) 165
Cash operating profit
US$ m 2.1 7.0 (70) 2.8
ZAR m 16.7 53.1 (69) 20.0
Capital expenditure (net)
US$ m 2.2 3.7 41 1.9
ZAR m 17.4 28.6 39 13.7
Total gold production was 7% lower at 32 054 oz, reflecting declines in both
underground and surface gold production.
Underground gold production was 7% lower at 23 020 oz due to an 11% decline in
underground throughput to 154 000 t. This was a consequence of 15 production
days lost due to Section 54 closures imposed by the Department of Minerals and
Energy following two seismicity-related fatalities, and two days of mourning
called by the National Union of Mineworkers.
Average underground yield improved by 5% to 4.65 g/t, reflecting the
commissioning during the quarter of a new R2.5 million ore pass system between
35 and 38 levels to split reef and waste.
While average surface yield was 3% higher at 0.32 g/t, surface throughput was
10% lower at 884 000 t. This resulted in a 7% decline in surface gold production
to 9 034 oz. During the quarter, higher volumes of lower grade No 4 Dam material
were recovered and treated.
Total cash operating costs rose by 15% to R199 799/kg or $798/oz, reflecting the
impact of power utility supplier Eskom`s 20% tariff increase and higher winter
power tariffs, as well as lower gold production. Underground cash operating
costs were 14% higher at R233 929/kg ($934/oz) and surface cash operating costs
19% higher at R112 836/kg or $451/oz.
Cash operating profit was 69% lower at R16.7 million, reflecting lower
production higher cash operating costs, and a lower gold price received.
Capital expenditure was 39% lower at R17.4 million, reflecting completion of the
new ore pass system, a new surface compressed air pipe line to improve the
mine`s underground compressed air network and 75% of all construction work on
the Way Ahead Project ("WAP") at No 5 Shaft.
Mining from the WAP began during the first week of October and production is
expected to rise to 3 100 oz in the fourth quarter of 2009. Development of the
15/29 Incline Project continues on schedule with first production planned
towards the end of the fourth quarter of 2009.
Crown Quarter Quarter % Quarter
Sep 08 Jun 08 Change Sep 07
Ore milled t`000 2 066 2 031 2 2 147
Yield g/t 0.36 0.33 9 0.35
Gold produced oz 23 985 21 573 11 24 371
kg 746 671 11 758
Cash operating costs
US$/oz 544 529 (3) 515
ZAR/kg 136 075 133 159 (2) 117 825
ZAR/t 49 44 (11) 42
Cash operating profit
US$ m 7.7 8.0 (4) 4.1
ZAR m 60.0 61.4 (2) 29.3
Capital expenditure (net)
US$ m 1.6 4.9 67 0.2
ZAR m 12.2 35.9 66 1.5
Gold production increased by 11% to 23 985 oz, reflecting a 2% increase in
throughput to 2 066 000 t and a 9% increase in the average yield to 0.36 g/t,
the latter due to the recovery of higher grade material from the Mennells site
and of higher grade remnants from the CMR and Robertson Deep sites.
Cash operating costs were 2% higher at R136 075/kg. Cash operating profit was 2%
lower at R60.0 million, a consequence both of higher cash operating costs and a
lower gold price received.
Capital expenditure was 66% lower at R12.2 million, reflecting disbursement of
the bulk of the costs of preparing the Top Star dump, south of Johannesburg
Central Business District, for mining.
In August, the Department of Minerals and Energy granted the company a licence
to mine the Top Star dump and construction of the required infrastructure is
approximately 90% complete. Commissioning is expected to begin early in November
and the rate of recovery to have reached 100 000 tpm by the end of November,
which is half of the planned full recovery rate.
ERPM Quarter Quarter % Quarter
Sep 08 Jun 08 Change Sep 07
Ore milled
Underground t`000 64 68 (6) 85
Surface t`000 379 358 6 506
Total t`000 443 426 4 591
Yield
Underground g/t 5.30 5.00 6 6.47
Surface g/t 0.32 0.36 (11) 0.45
Total g/t 1.04 1.10 (5) 1.31
Gold produced
Underground oz 10 899 10 930 - 17 684
kg 339 340 - 550
Surface oz 3 923 4 147 (5) 7 267
kg 122 129 (5) 226
Total oz 14 822 15 077 (2) 24 951
kg 461 469 (2) 776
Cash operating costs
Underground US$/oz 1 062 966 (10) 647
ZAR/kg 265 794 243 865 (9) 148 145
ZAR/t 1 408 1 219 (16) 955
Surface US$/oz 840 750 (12) 512
ZAR/kg 210 385 189 000 (11) 117 159
ZAR/t 68 68 - 52
Total US$/oz 1 003 907 (11) 608
ZAR/kg 251 130 228 774 (10) 139 121
ZAR/t 261 252 (4) 183
Cash operating (loss)/profit
US$ m (2.1) (0.4) (425) 1.8
ZAR m (16.5) (2.3) (617) 13.0
Capital expenditure (net)
US$ m 0.6 1.2 50 0.9
ZAR m 4.3 9.1 53 6.2
Total gold production was 2% lower at 14 822 oz, reflecting lower surface gold
production.
Underground gold production was virtually unchanged at 10 899 oz. Although
underground throughput was 6% lower due to the residual impact of the previous
quarter`s restructuring, the average underground yield improved by 6% to 5.30
g/t, reflecting the elimination of the unprofitable 73 and 74 longwalls.
While surface throughput increased by 6% to 379 000 t, the average surface yield
declined by 11% to 0.32 g/t, reflecting the recovery of lower grade material
from the Cason dump`s southern face. Consequently, surface gold production was
5% lower at 3 923 oz.
Total cash operating costs increased by 10% to R251 130/kg, a consequence of
lower production, as well as Eskom`s 20% tariff increase and higher winter
tariffs. Underground cash operating costs were 9% higher at R265 794/kg and
surface cash operating costs 11% higher R210 385/kg.
The cash operating loss for the quarter increased to R16.5 million from R2.3
million, reflecting lower production, higher cash operating costs and a lower
gold price received.
EXPLORATION AND PROSPECTING
ERPM
ERPM mining lease area
During the quarter, drilling was confined to cover (71 East 2) and structure (73
west X/C N). Currently, a hole is being drilled at 70 E FW drive to determine
the parting between the Composite Reef and the Jeppestown Shales footwall. The
core will be used to determine the rock strengths of the shale horizon, which is
in closer proximity to the mining horizon than initially thought.
Extension 1
A geological report to accompany Turgis Consulting`s decline feasibility study
is in the process of being finalized. A revised structure plan for Extension 1
has been produced, utilizing geophysical information and historical Sallies
data. An unconformity between the Jeppestown Shales and the Composite Reef has
been identified which results in a narrowing of their middling towards the east
and north.
Extension 2
An agreement has been drawn up between DRDGOLD and Anglogold Ashanti Limited
("Anglogold") where a data exchange will take place between the two companies.
Anglogold will provide access to the Sallies exploration borehole core and
copies of the logging and reports in exchange for sampling data and reports from
Blyvoor.
Blyvoor
For the quarter, three prospect holes intersected the Carbon Leader Reef in the
following areas 38 31 fault block, 35 32 X/C N and 38 34, assaying at 219 cmgt,
894 cmgt and 642 cmgt respectively. Main Reef was intersected in two holes 38 34
(522 cmgt) and 38 33 X/C N (awaiting assay). Cover drilling in 38 21 FW Dr W in
the South West block intersected methane.
The assay results of phase 2 of the drilling of Blyvoor No7 slimes dam were
received and averaged 0.247 g/t. The average grade of the phase 1 and 2 drilling
equates to 0.279 g/t. The recovery percentages of the remainder of the
operations slimes dams are in the process of being determined to develop a
strategy for the surface operations going forward.
Crown and Ergo
Exploration activity continues to be confined to the ERGO JV, with in excess of
10 300 m of augering having been conducted for exploration and metallurgical
test work to date.
During the quarter, drilling was completed at the Brakpan, Van Dyk and Grootvlei
complexes. Exploration is currently in progress at Marievale, the final complex
to be explored in the initial exploration programme. Additional drilling, in the
form of cased holes, is scheduled in areas where conventional drilling was not
possible.
The outstanding assay results for Homestead and Rooikraal were received during
the quarter. In addition, partial assay results were returned for Brakpan and
Van Dyk. The Homestead and Rooikraal results are similar to those obtained for
the other current Crown deposition complexes and are in line with initial
estimates, with the exception of lower uranium values. Similarly, the initial
Brakpan results indicate a lower uranium grade than anticipated, whilst Van
Dyk`s initial assays show a close correlation with the initial estimate. The
lower uranium grade reported for the larger complexes may be as a result of the
drilling pattern (ie close proximity to the sides), which requires verification.
All relevant technical information pertaining to the complexes is forwarded to
RSG Global, for the generation of Competent Person`s Reports ("CPRs"). During
the quarter a SAMREC-compliant gold, uranium and sulphur resource for the
Elsburg JV was declared.
A draft CPR pertaining to the ERGO phase 1 gold reserve (Elsburg and Benoni) has
also been received and is currently under review. The final CPR for the GMTS,
Homestead and Mooifontein complexes has been delayed due to survey problems
associated with the insertion of historical boreholes into the geological model.
The report is expected to be finalized during October.
DISCONTINUED OPERATIONS - EMPEROR MINES LIMITED
Tolukuma Quarter Quarter % Quarter
Sep 08 Jun 08 Change Sep 07
Ore milled t`000 - - - 45
Yield g/t - - - 6.91
Gold produced oz - - - 10 033
kg - - - 311
Cash operating costs
US$/oz - - - 1 017
ZAR/kg - - - 233 707
ZAR/t - - - 1 615
Cash operating loss
US$ m - - - (0.9)
ZAR m - - - (6.5)
Capital expenditure (net)
US$ m - - - 2.1
ZAR m - - - 15.0
CASH OPERATING COSTS RECONCILIATION
CONTINUING OPERATIONS (R000 unless otherwise stated)
Crown ERPM Blyvoor Total
Total cash costs 109 130 121 793 212 802 443 725
Movement in gold in process 1 243 1 991 (6 245) (3 011)
Less: production taxes,
rehabilitation and other costs 5 111 3 035 3 162 11 308
Less: Retrenchment costs - 858 - 858
Less: Corporate and general
administration costs 3 750 4 120 4 195 12 065
Cash operating costs 101 512 115 771 199 200 416 483
Gold produced (kgs) 746 461 997 2 204
Cash operating costs (R/kg) 136 075 251 130 199 799 188 967
Cash operating costs (US$/oz) 544 1 003 798 755
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:
GC Campbell*(Non-Executive Chairman); DJM Blackmur** (Senior Non-Executive
Director); RP Hume; EA Jeneker
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
23 October 2008
Sponsor
QuestCo Sponsors (Pty) Limited
Date: 23/10/2008 08:00:12 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
