| Thu 20 Aug 2009, 8:00 | | DRD - DRDGold - Report to shareholders for the quarter and year ended 30 June |
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DRD
DRDD
DRD - DRDGold - Report to shareholders for the quarter and year ended 30 June
2009
DRDGOLD LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1895/000926/06)
JSE trading symbol: DRD
ISIN: ZAE000058723
Issuer code: DUSM
Nasdaq trading symbol: DROOY
("DRDGOLD" or "the company")
REPORT TO SHAREHOLDERS FOR THE QUARTER AND YEAR ENDED 30 JUNE 2009
GROUP RESULTS
KEY FEATURES
Dividend declared of 5 cents per share
Surface production steady
Acquisition of the remaining 50% interest in ErgoGold completed
Operating profit of R282.7 million for the year
Headline earnings for the year of 33.8 cents per share
REVIEW OF OPERATIONS
GROUP Quarter Quarter % Quarter
Jun 09 Mar 09 Change Jun 08
Gold production
Continuing operations oz 57 775 58 997 (2) 71 211
kg 1 797 1 835 (2) 2 215
Discontinued operation oz - - - -
kg - - - -
Group oz 57 775 58 997 (2) 71 211
kg 1 797 1 835 (2) 2 215
Cash operating costs
Continuing operations US$/oz 855 653 (31) 689
ZAR/kg 235 499 211 666 (11) 173 034
Discontinued operation US$/oz - - - -
ZAR/kg - - - -
Group US$/oz 855 653 (31) 689
ZAR/kg 235 499 211 666 (11) 173 034
Gold price received US$/oz 900 915 (2) 893
ZAR/kg 244 927 292 369 (16) 224 552
Capital expenditure US$ million 13.7 6.4 (114) 20.0
ZAR million 117.3 65.8 (78) 149.8
12 months to 12 months to
30 Jun 09 30 Jun 08
Gold production
Continuing operations oz 247 690 308 005
kg 7 704 9 580
Discontinued operation oz - 13 427
kg - 417
Group oz 247 690 321 432
kg 7 704 9 997
Cash operating costs
Continuing operations US$/oz 730 657
ZAR/kg 212 228 154 451
Discontinued operation US$/oz - 1 098
ZAR/kg - 264 264
Group US$/oz 730 675
ZAR/kg 212 228 159 032
Gold price received US$/oz 861 817
ZAR/kg 250 589 192 143
Capital expenditure US$ million 38.4 36.5
ZAR million 345.1 267.2
STOCK
ISSUED CAPITAL
378 001 303 ordinary no par value shares
5 000 000 cumulative preference shares
Total ordinary no par value shares issued and committed: 395 306 232
STOCK TRADED JSE NASDAQ*
Avg. volume for the quarter per day (000) 647 1 913
% of issued stock traded (annualised) 45 132
Price - High R8.45 US$1.059
- Low R5.91 US$0.680
- Close R6.03 US$0.759
*This data represents per share data and not per ADS data - one ADS reflects
ten ordinary shares.
FORWARD-LOOKING STATEMENTS
Many factors could cause the actual results, performance or achievements of
DRDGOLD 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 DRDGOLD serves, a drop in the gold price, a
sustained 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 2008, which was filed with the United States Securities and
Exchange Commission on 12 December 2008 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
It is encouraging to report that we have recorded our second successive
fatality-free quarter. This points clearly to the logic of our strategic
objective to reduce risk in our company, and it is a particularly creditable
performance by Blyvooruitzicht Gold Mining Company Limited ("Blyvoor"), our
only remaining underground operation.
While Blyvoor`s Disabling Injury Frequency Rate ("DIFR") deteriorated slightly
from 13.31 to 13.55, its Reportable Injury Frequency Rate ("RIFR") remained
constant at 4.34 and its Dressing Station Injury Rate ("DSIR") improved from
27.97 to 26.58.
The mine as a whole recorded 1 000 000 fatality-free shifts on 10 June 2009.
Crown Gold Recoveries (Pty) Limited ("Crown") recorded improvements in respect
of all measured safety parameters: a pleasing result, considering that
ErgoGold`s statistics are now included. The RIFR dropped from 2.28 to 0, the
DIFR from 5.7 to 1.34 and the DSIR from 15.9 to 8.74.
We are now well-placed for the introduction of our behaviour-based safety
programme at Blyvoor`s No 6 Shaft during August and September 2009, to be
followed by an operations-wide rollout. Various operation- and issues-specific
safety campaigns continued throughout the quarter.
In respect of occupational hygiene, health codes of practice for airborne
pollutants, noise and thermal stress have been signed off by all stakeholders
and will be submitted to the Department of Mineral Resources.
At Blyvoor, quantitative risk assessments for airborne pollutants underground
at each of the shafts are at varying stages of completion and a baseline
quantitative risk assessment for noise in respect of surface working areas has
begun. The TB prevention programme continues to function well and a Wellness
Day has been scheduled for 14 September 2009.
Total expenditure on environmental issues for the quarter was R3.9 million.
Production
Total gold production for the quarter was 2% lower at 57 775oz, reflecting a
5% decline in underground production at Blyvoor, where a number of high-grade
panels in the 38/29 section at No 5 Shaft were knocked out by a large seismic
event on 29 May 2009. Surface gold production remained steady at 35 430oz.
While 100% of ErgoGold`s production (previously known as the Elsburg Gold
Mining Joint Venture) is reflected in our results for the first time this
quarter, recoveries from L29 Dump had not, by quarter end, reached project
assumptions. Reclamation from the Elsburg Tailings Complex ("ETC") started on
3 August 2009, and we aim to achieve steady state from this second feeder line
to the Brakpan plant in September. Further information, per operation, is
provided below.
Total gold production for the year from continuing operations was 20% lower at
247 690oz, the major contributing factor being the suspension of underground
mining at ERPM in the second quarter, and the downward volume adjustment at
Crown, as part of the decommissioning of the Crown Tailings Deposition
Facility.
Reserves and resources
Attributable Mineral Resources increased by 3% from 54.7Moz in financial year
2008 to 56.4Moz in financial year 2009. Attributable Ore Reserves decreased by
24% from 7.9Moz in FY08 to 6.0Moz in FY09.
This information has been prepared in compliance with the SAMREC Code by Mr R.
Botha who is an employee of DRDGOLD and has been reviewed by Mr K. Lomberg, an
independent advisor from Coffey Mining (SA) Pty Limited.
The rise in attributable Mineral Resources reflects the company`s acquisition
of the remaining 50% of ErgoGold, which added 1.9Moz to the group`s total
resources.
The decrease in attributable Ore Reserves was primarily because of ERPM`s
underground operations being suspended.
Financial
Total revenue for the quarter was 22% lower at R420.7 million, due mainly to a
16% drop in the average Rand gold price received to R244 927/kg. After
accounting for total cash operating costs - 9% higher at R423.2 million - cash
operating profit was 99% lower at R1.3 million. Depreciation of R41.6 million
resulted in a gross loss from operating activities of R47.9 million compared
with the previous quarter`s gross profit of R116.0 million. Higher impairment
provisions and administration expenses and general costs, partly offset by R53
million of negative goodwill, were the major contributors to a pre-tax loss of
R81.2 million compared with a pre-tax profit of R95.0 million in the previous
quarter. Net profit was 2% lower at R42.6 million, after accounting for
deferred tax of R120.6 million.
Total revenue for the year was 4% higher at R1 910.7 million, reflecting a 30%
increase in the average Rand gold price received for the year to R250 589/kg.
Operating profit, however, was 26% lower at R282.7 million after accounting
for total cash operating costs, which were 11% higher at R1 635.0 million.
Higher depreciation charges and retrenchment costs resulted in a 52% decline
in gross profit to R129.1 million. The negative effect of higher
administration expenses and general costs was offset by a profit on financial
liabilities measured at amortised costs, goodwill and higher finance income,
leaving profit before tax 4% lower at R82.3 million. After deduction of tax of
R46.2 million and deferred tax, net profit was R110.7 million. This compares
with the previous year`s profit of R1 225.1 million, which reflected a profit
on the sale of the company`s Australasian assets.
Corporate
During the year, we acquired Mintails SA (Pty) Limited`s ("Mintails SA`s") 50%
interest in ErgoGold, the gold component of the first phase of the Ergo Joint
Venture. This was a valuable acquisition for us, bringing in 100% of the
envisaged production, revenue and profits from Phase 1 and presenting us with
opportunities to explore, develop and ultimately exploit surface retreatment
synergies between our veteran Crown operation and Ergo. A further very
advantageous development for us is that Crown also secured the contractual
right from jointly owned Ergo Mining (Pty) Limited to deposit its entire
tailings flow on to the Brakpan and Withok tailings facility. Potentially,
this development could extend Crown`s life of mine by several years.
Subsequent to the purchase of Mintails SA`s 50% interest in ErgoGold, we
offered to purchase the remainder of its South African surface assets, but the
offer was rejected.
Detailed operating and financial review
Blyvoor
Total gold production in the quarter under review was virtually unchanged at
31 766oz (32 248oz in the previous quarter). A 7% increase in total throughput
to 1 014 000t offset the impact of an 8% decline in overall yield to 0.97g/t.
Gold production from underground was 5% lower at 21 349oz, a consequence of an
8% decline in average underground grade to 4.37g/t. The lower average grade
resulted both from the loss of high-grade panels at No 5 Shaft due to
seismicity and to an increase in mining of lower-grade panels at No 4 Shaft.
Underground throughput was 3% higher at 152 000t.
Surface gold production increased by 7% to 10 417oz due to an 8% rise in
surface throughput to 862 000t. Higher throughput reflected the successful
commissioning of a new pipeline from the slimes operation transfer pump
station to the plant. The average surface yield was maintained at 0.38g/t.
Total cash operating costs rose by 12% to R227 831/kg, reflecting the impact
of higher winter power tariffs. Underground cash operating costs were 17%
higher at R289 816/kg and surface cash operating costs 3% higher at R100
799/kg.
Cash operating profit was 79% lower at R19.2 million, a consequence of a
substantially lower average Rand gold price received.
Capital expenditure was 10% lower at R24.0 million.
At the Way Ahead Project, there has been good production build-up. Additional
crews have been deployed and the 1 200mSquared per month targeted for the end
of June 2009 is being exceeded. The upper portion of the 15/29 Incline Project
is now in production but overall build-up has been slower than anticipated.
Deepening of the incline to facilitate smoother loading of reef is in
progress.
Crown
Gold production was 13% lower at 17 940oz, reflecting both a 10% decline in
throughput to 1 414 000t and a 5% decline in the average yield to 0.39g/t.
Lower throughput was in line with a planned reduction to 400 000tpm to effect
the Crown Tailings Deposition Facility closure plan, while lower yield
resulted from completion of reclamation of the Mennells dump.
Cash operating costs increased by 10% to R187 314/kg due to lower gold
production. Cash operating profit was 69% lower, reflecting both lower
production and a lower average Rand gold price received.
Capital expenditure declined by 23% to R7.9 million, reflecting conclusion of
the construction of buttresses at the Crown Tailings Deposition Facility.
Work continued on an environmental impact assessment for a proposed R212
million pipeline linking the Crown plants to Ergo`s tailings deposition site
at Brakpan.
ERPM
Total gold production increased by 44% to 6 204oz, reflecting a 59%
improvement in surface gold production to 5 208oz. Continued clean-up at the
suspended underground operation yielded 996oz.
Higher surface gold production resulted both from a 26% increase in surface
throughput to 428 000t and a 27% increase in the average surface yield to
0.38g/t. Throughput and yield improvements reflected successful completion of
a shift in the direction of reclamation at the Cason Dump into higher-grade
areas.
Total cash operating costs were 31% lower at R295 601/kg. This reflects a 23%
drop in surface cash operating costs to R197 173/kg, which resulted from
higher surface gold production. Underground cash operating costs, although
17% lower at R809 968/kg, were nevertheless unacceptably high. Yields from
remnant clean-up were lower than planned, and therefore did not offset the
care and maintenance costs of the underground operations to the extent that we
had hoped. These were the major contributors to a 3% increase in the cash
operating loss to R18.3 million.
No capital expenditure was incurred during the quarter.
ErgoGold
Results for the quarter under review are not directly comparable with those of
the previous quarter. This is due to DRDGOLD acquiring full ownership of
ErgoGold with effect from 1 April 2009.
Work on ErgoGold`s elution plant was completed in the second week of April.
While volume flows of the first circuit - from the L29 dump - were
satisfactory, initial recoveries of 0.04g/t at quarter-end were below project
specifications, requiring a number of engineering modifications to the elution
plant.
The second circuit, linking the 186Mt ETC site with the Brakpan plant, came
into production on 3 August 2009. Capital expenditure totalled R85.4 million,
mainly to complete the reclamation site.
With two lines now operational - one from L29 and the other from ETC - we
expect to achieve steady state in the September quarter. Accelerated capital
at the ETC site provides us with surge capacity on the Elsburg line and the
ability to manipulate the flow rates from our two reclamation sites.
Dividend
The directors have declared a final dividend of 5 South African cents per
ordinary share for the year ended 30 June 2009, which amounts to a total final
dividend payout of R18.9 million. This compares with the final dividend of 10
cents per share for the year ended 30 June 2008, amounting to a total dividend
payout of R37.7 million. The directors are of the view that the need to
reward shareholders for their continuing support must be balanced against the
negative impact that the Rand/Dollar exchange rate currently has on revenues.
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 follow:
2009
Last date to trade ordinary shares cum dividend Friday, 2 October
Ordinary shares trade ex dividend Monday, 5 October
Record date Friday, 9 October
Payment date Monday, 12 October
On payment date, dividends due to holders of certificated securities on the
South African share register will either be electronically transferred to the
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, 5 October
2009 and Friday 9 October 2009, both days inclusive, no transfers between the
South African and any other share register will be permitted and no ordinary
shares pertaining to the South African share register may be dematerialised or
rematerialised.
To holders of American Depository Shares
Each American Depository Share ("ADS") represents ten ordinary shares
2009
ADSs trade ex dividend on Nasdaq Wednesday, 7 October
Record date Friday, 9 October
Approximate date for currency conversion Friday, 16 October
Approximate payment date of dividend Monday, 26 October
Assuming an exchange rate of R8.14/$1, the dividend payable on an ADS is
equivalent to 6.14 US cents. However, the actual rate of payment will depend
on the exchange rate on the date for currency conversion.
Looking ahead
Our asset mix and stated conservative management approach has seen us through
the quarter and year under review. We have entered the first quarter of the
new financial year with the means to grow our surface operations intact, and
the resolve to address the key risks associated with our underground
footprint.
At Blyvoor, we will rehabilitate the damaged higher grade panels at No 5 Shaft
over an estimated six months, and increase mining from the Main Reef to offset
the volatilities we see in the more remote high grade areas of 5 Shaft. We
have resolved, also, to discontinue care and maintenance and close ERPM`s
underground operation.
The successful commissioning early in the current quarter of the ETC line
brings us closer to ErgoGold starting to deliver to expectation. We will
continue with our investigation into the feasibility of a pipeline linking the
Crown plants to Ergo`s Brakpan tailings deposition site over the next six
months. This, should it go ahead, will resolve the deposition constraint we
currently face as the Crown Tailings Deposition Complex nears closure. It will
also open up a range of surface retreatment synergies between Crown and Ergo
and further consolidate our position in this lower-risk, lower-cost, higher-
margin sector of the gold business in South Africa.
Niel Pretorius
Chief Executive Officer
NOTE REGARDING FINANCIAL INFORMATION
The condensed preliminary consolidated financial statements below have been
prepared in accordance with International Financial Reporting Standards
("IFRS") and the disclosure requirements of IAS 34, which is consistent with
the accounting policies used in the audited annual financial statements for
the year ended 30 June 2008.
KPMG`s unmodified review report on the condensed annual consolidated financial
statements, prepared in accordance with IFRS, is available for inspection at
the company`s registered office.
CONDENSED CONSOLIDATED Quarter Quarter Quarter
Statement of comprehensive Jun 09 Mar 09 Jun 08
Income R m R m R m
Unaudited Unaudited Unaudited
Continuing operations
Gold and silver revenue 420.7 536.5 495.4
Net operating costs (419.4) (406.6) (368.5)
Cash operating costs (423.2) (388.4) (383.2)
Movement in gold in process 3.8 (18.2) 14.7
Operating profit 1.3 129.9 126.9
Depreciation (41.6) (23.5) (11.0)
Movement in provision for
environmental rehabilitation (6.2) 7.8 (16.0)
Retrenchment costs (1.4) 1.8 (5.1)
Gross (loss)/profit from operating
activities (47.9) 116.0 94.8
Impairments (19.4) (3.3) (63.9)
Administration expenses and
general costs (56.5) (37.4) (26.7)
Share-based payments (1.7) (2.0) (5.9)
Financial liabilities measured
at amortised cost - note 1 (8.8) 5.7 (88.5)
Recognition of goodwill on purchase
of subsidiary - note 2 53.0 - -
Loss on sale of assets and investments - (0.3) (0.9)
Finance income 3.3 20.6 35.1
Finance expenses and unwinding
of provisions (3.2) (4.3) 4.0
(Loss)/profit before taxation (81.2) 95.0 (52.0)
Income tax 3.2 (25.2) 3.8
Deferred tax 120.6 (26.3) 81.6
Profit after taxation 42.6 43.5 33.4
Discontinued operations
Loss for the period
from discontinued operations - - (0.5)
Profit on sale of assets and investments - - 12.6
Impairment from discontinued operations - - (1.0)
Net profit for the period 42.6 43.5 44.5
Attributable to:
Ordinary shareholders of the company 37.2 34.1 40.2
Minority interest 5.4 9.4 4.3
42.6 43.5 44.5
Other comprehensive income
Foreign exchange translation 10.0 1.1 (1.1)
Other income 192.9 - 5.2
Mark to Market of available for
sale investments (1.1) - 1.7
Total comprehensive income
for the period 244.4 44.6 50.3
Attributable to:
Ordinary shareholders of the company 179.3 35.2 40.4
Minority interest 65.1 9.4 9.9
244.4 44.6 50.3
Reconciliation of headline (loss)/profit
Net profit 37.2 34.1 40.2
Adjusted for:
Impairments 19.4 3.3 63.9
Impairment from discontinued operation - - 1.0
Profit on sale of discontinued
operations - - (12.6)
Goodwill on purchase of asset (53.0) - -
Loss/(profit) on sale of
assets and investments - 0.3 (9.2)
Minority share of headline
earnings adjustments (4.4) (0.1) (10.5)
Headline (loss)/profit (0.8) 37.6 72.8
Headline (loss)/earnings
per share-cents (0.2) 10.0 19.3
Basic earnings per share-cents 9.8 9.0 10.7
Diluted headline (loss)/earnings per
share-cents (0.2) 10.0 19.3
Diluted basic earnings per
share - cents 9.8 9.0 10.7
Calculated on the weighted average
ordinary shares issued of 377 733 911 376 884 611 376 536 319
CONDENSED CONSOLIDATED 12 Months to 12 Months to
Statement of comprehensive Jun 09 Jun 08
Income R m R m
Reviewed Reviewed
Continuing operations
Gold and silver revenue 1 910.7 1 843.9
Net operating costs (1 628.0) (1 464.3)
Cash operating costs (1 635.0) (1 479.6)
Movement in gold in process 7.0 15.3
Operating profit 282.7 379.6
Depreciation (99.2) (69.0)
Movement in provision for
environmental rehabilitation (19.5) (30.2)
Retrenchment costs (34.9) (11.3)
Gross profit from operating activities 129.1 269.1
Impairments (75.1) (63.9)
Administration expenses and general costs (138.3) (96.1)
Share-based payments (7.9) (6.6)
Financial liabilities measured at
amortised cost - note 1 44.0 (89.3)
Recognition of goodwill on purchase
of subsidiary - note 2 53.0 -
Profit on sale of assets and investments 8.3 11.1
Finance income 82.5 75.7
Finance expenses and unwinding of provisions (13.3) (13.9)
Profit before taxation 82.3 86.1
Income tax (46.2) (13.3)
Deferred tax 74.6 81.6
Profit after taxation 110.7 154.4
Discontinued operations
Loss for the period from discontinued operations - (51.8)
Profit on sale of assets and investments - 1 169.2
Impairment from discontinued operations - (46.7)
Net profit for the period 110.7 1 225.1
Attributable to:
Ordinary shareholders of the company 129.1 996.1
Minority interest (18.4) 229.0
110.7 1 225.1
Other comprehensive income
Foreign exchange translation (0.6) 83.6
Other income 192.9 (184.1)
Mark to market of available for sale investments (1.1) 1.7
Total comprehensive income for the period 301.9 1 126.3
Attributable to:
Ordinary shareholders of the company 260.6 1 251.4
Minority interest 41.3 (125.1)
301.9 1 126.3
Reconciliation of headline profit
Net profit 129.1 996.1
Adjusted for:
Impairments 75.1 63.9
Impairment from discontinued operation - 46.7
Profit on sale of discontinued operations - (1 169.2)
Goodwill on purchase of asset (53.0) -
Profit on sale of assets and investments (8.3) (22.1)
Minority share of headline earnings adjustments (15.5) 198.5
Headline profit 127.4 113.9
Headline earnings per share-cents 33.8 30.3
Basic earnings per share-cents 34.3 264.9
Diluted headline earnings per share-cents 33.8 30.3
Diluted basic earnings per share cents 34.3 264.9
Calculated on the weighted average
ordinary shares issued of 376 678 974 376 023 344
CONDENSED CONSOLIDATED As at As at As at
Statement of financial 30 Jun 09 31 Mar 09 30 Jun 08
position Rm Rm Rm
Reviewed Unaudited Reviewed
Assets
Property, plant and
equipment - note 2 1 737.5 932.8 815.6
Non-current investments and
other assets 43.0 65.4 65.3
Environmental rehabilitation
trusts funds 129.7 125.6 110.8
Deferred tax 165.1 35.6 81.6
Current assets 550.5 989.9 1 189.2
Inventories 93.9 80.6 62.9
Trade and other receivables 88.0 348.6 240.5
Cash and cash equivalents 353.6 545.7 846.1
Assets classified as held for sale 15.0 15.0 39.7
Total assets 2 625.8 2 149.3 2 262.5
Equity and Liabilities
Equity 1 584.0 1 335.7 1 305.5
Shareholders equity 1 481.5 1 298.3 1 244.3
Minority shareholders interest 102.5 37.4 61.2
Long-term liabilities 65.1 88.2 125.7
Post retirement and other
employee benefits 43.6 24.7 22.7
Provision for environmental
rehabilitation 412.5 401.1 381.3
Deferred tax 194.6 - -
Current liabilities 326.0 299.6 427.3
Trade and other payables 323.9 292.8 387.4
Short term liabilities 2.1 6.8 39.9
Total equity and liabilities 2 625.8 2 149.3 2 262.5
CONDENSED Quarter Quarter Quarter
Statement of changes in equity Jun 09 Mar 09 Jun 08
Rm Rm Rm
Unaudited Unaudited Unaudited
Balance at the beginning of
the period 1 335.7 1 285.4 1 248.6
Share capital issued 2.2 3.7 0.7
for share options exercised 2.2 4.1 0.7
for costs relating to issue of shares - (0.4) -
Increase in share-based
payment reserve 1.7 2.0 5.9
Net profit attributable to
ordinary shareholders 37.2 34.1 40.2
Net profit attributed to
minority shareholders 5.4 9.4 4.3
Increase in minorities 59.7 - 5.2
Other comprehensive income 142.1 1.1 0.6
Balance as at the end of the
period 1 584.0 1 335.7 1 305.5
CONDENSED 12 months 12 months
Statement of changes in equity 30 Jun 09 30 Jun 08
Rm Rm
Reviewed Reviewed
Balance at the beginning of the period 1 305.5 143.5
Share capital issued 6.3 29.1
for acquisition finance and cash - 28.0
for share options exercised 6.7 2.3
for costs relating to issue of shares (0.4) (1.2)
Increase in share-based payment reserve 7.9 6.6
Net profit attributable to ordinary shareholders 129.1 996.1
Net (loss)/profit attributed to
minority shareholders (18.4) 229.0
Dividends declared (37.6) -
Increase /(decrease) in minorities 59.7 (170.1)
Other comprehensive income 131.5 71.3
Balance as at the end of the period 1 584.0 1 305.5
CONDENSED CONSOLIDATED Quarter Quarter Quarter
Statement of cash flows Jun 09 Mar 09 Jun 08
Rm Rm Rm
Unaudited Unaudited Unaudited
Net cash inflow from operations 39.5 114.1 238.1
Net cash outflow from
investing activities (377.3) (88.0) (150.5)
Net cash in/(out) flow from
financing activities 156.0 (89.7) 26.0
(Decrease)/increase in cash and
cash equivalents (181.8) (63.6) 113.6
Translation adjustment (10.3) 0.3 1.0
Opening cash and cash equivalents 545.7 609.0 731.5
Closing cash and cash equivalents 353.6 545.7 846.1
Reconciliation of net cash inflow from operations
Profit before taxation (81.2) 95.0 (52.0)
Net operating loss from
discontinued operations - - (0.5)
(81.2) 95.0 (52.5)
Adjusted for:
Movement in gold process (3.8) 18.2 (14.7)
Depreciation and impairments 61.0 26.8 74.9
Movement in provision for
Environmental rehabilitation 6.2 (7.8) 16.0
Share-based payments 1.7 2.0 5.9
Loss/(profit) on financial instruments 8.8 (5.7) 88.5
Loss on sale of assets and investments - 0.3 0.9
Recognition of goodwill on
purchase of subsidiary (53.0) - -
Finance expenses and unwinding of
provisions 3.2 3.2 (7.0)
Growth in environmental trust funds (2.8) (3.3) (2.5)
Other non cash items 38.5 8.3 (20.4)
Taxation paid (20.2) (1.8) (11.8)
Working capital changes 81.1 (21.1) 160.8
Net cash inflow from operations 39.5 114.1 238.1
CONDENSED CONSOLIDATED 12 months 12 months
Statement of cash flows 30 Jun 09 30 Jun 08
Rm Rm
Reviewed Reviewed
Net cash inflow from operations 208.4 61.4
Net cash (out)/in flow
from investing activities (593.3) 1 531.0
Net cash out flow from financing activities (85.8) (840.0)
(Decrease)/increase in cash
and cash equivalents (470.7) 752.4
Translation adjustment (21.8) (15.6)
Opening cash and cash equivalents 846.1 109.3
Closing cash and cash equivalents 353.6 846.1
Reconciliation of net cash inflow from operations
Profit before tax 82.3 86.1
Net operating loss from discontinued operations - (51.8)
82.3 34.3
Adjusted for:
Movement in gold process (7.0) (15.3)
Depreciation and impairments 174.3 132.9
Movement in provision for
environmental rehabilitation 19.5 30.2
Share-based payments 7.9 6.6
(Profit)/loss on financial instruments (44.0) 89.3
Profit on sale of assets and investments (8.3) (11.1)
Recognition of goodwill on purchase
of subsidiary (53.0) -
Finance expenses and unwinding of provisions 9.8 4.7
Growth in environmental trust funds (12.9) (8.5)
Other non cash items 42.7 (39.0)
Taxation paid (46.9) (40.8)
Working capital changes 44.0 (121.9)
Net cash inflow from operations 208.4 61.4
NOTES TO FINANCIAL STATEMENTS
1. Financial liabilities measured at amortised cost
The net gain/(loss) on financial liabilities measured at amortised cost in the
statement of comprehensive income comprises the expected cash flows of the
preference shares issued to Khumo Gold SPV (Pty) Ltd and the DRDGOLD SA
Empowerment Trust. These preference shares are re-measured on a quarterly
basis and based on the expected future cash flows from DRDGOLD South African
Operations (Pty) Limited.
2. Recognition of goodwill on purchase of asset
On 31 March 2009 the group acquired the remaining 50% interest in ErgoGold
(Elsburg Gold Mining Joint Venture) with ERPM acquiring 15% and DRDGOLD
acquiring 35% for a cash consideration of R100 million and R177 million
respectively.
The fair value of the assets acquired at the date of acquisition, exceeded the
cost of the acquisition, therefore resulting in a bargain purchase. The
bargain purchase is a direct result of the favorable change in the gold price
since the period the purchase price was fixed and the higher gold price on the
date all the requirements were met for the acquisition to be recognized, which
is the date the fair value of the assets and liabilities were determined. The
resulting negative goodwill arising amounted to R53 million and was recognized
in the statement of comprehensive income.
The statement of comprehensive income since the acquisition relating to
ErgoGold, which has been consolidated since 1 April 2009, is set out below:
Statement of comprehensive income R million
Revenue 5.5
Cost of sales (17.1)
Operating loss (11.6)
Administration expenses and general costs (0.2)
Loss before taxation (11.8)
Statement of financial position as at 1 April 2009
Assets
Property, plant and equipment 887.4
Current assets
Inventory 17.9
Trade and other receivables 0.9
Cash and cash equivalents 1.7
Total fair value of assets 907.9
Non-current liabilities
Deferred tax liability on fair value adjustment 185.6
Current liabilities
Trade and other payables 33.4
Total fair value of liabilities 219.0
Fair value of net assets on date of acquisition 688.9
Minority interest in fair value of net assets
on date of acquisition 55.9
Acquisition date fair value of 50% initial
Equity interest on acquisition date 344.5
The statement of comprehensive income for the full 8 months trading period of
ErgoGold is set out below:
Statement of comprehensive income R million
Revenue 39.6
Cost of sales (105.1)
Operating loss (65.4)
Administration expenses and general costs (1.2)
Loss before taxation (66.7)
KEY OPERATING AND FINANCIAL RESULTS (Unaudited)
CONTINUING OPERATIONS Blyvoor Crown ERPM ErgoGold* Total
Ore milled (`000t)
Underground Jun 09 Qtr 152 - 61 - 213
Mar 09 Qtr 147 - 23 - 170
YTD Jun 09 603 - 184 - 787
Surface Jun 09 Qtr 862 1 414 428 1 525 4 229
Mar 09 Qtr 798 1 566 341 755 3 460
YTD Jun 09 3 433 6 577 1 430 2 296 13 736
Total Jun 09 Qtr 1 014 1 414 489 1 525 4 442
Mar 09 Qtr 945 1 566 364 755 3 630
YTD Jun 09 4 036 6 577 1 614 2 296 14 523
Yield (g/t)
Underground Jun 09 Qtr 4.37 - 0.51 - 3.26
Mar 09 Qtr 4.77 - 1.39 - 4.31
YTD Jun 09 4.59 - 3.20 - 4.26
Surface Jun 09 Qtr 0.38 0.39 0.38 0.04 0.26
Mar 09 Qtr 0.38 0.41 0.30 0.07 0.32
YTD Jun 09 0.37 0.38 0.33 0.05 0.32
Total Jun 09 Qtr 0.97 0.39 0.39 0.04 0.40
Mar 09 Qtr 1.06 0.41 0.37 0.07 0.51
YTD Jun 09 1.00 0.38 0.66 0.05 0.53
Gold Produced (oz)
Underground Jun 09 Qtr 21 349 - 996 - 22 345
Mar 09 Qtr 22 538 - 1 029 - 23 567
YTD Jun 09 88 898 - 18 935 - 107 833
Surface Jun 09 Qtr 10 417 17 940 5 208 1 865 35 430
Mar 09 Qtr 9 710 20 705 3 279 1 736 35 430
YTD Jun 09 40 575 80 377 15 239 3 666 139 857
Total Jun 09 Qtr 31 766 17 940 6 204 1 865 57 775
Mar 09 Qtr 32 248 20 705 4 308 1 736 58 997
YTD Jun 09 129 473 80 377 34 174 3 666 247 690
Gold Produced (kg)
Underground Jun 09 Qtr 664 - 31 - 695
Mar 09 Qtr 701 - 32 - 733
YTD Jun 09 2 765 - 589 - 3 354
Surface Jun 09 Qtr 324 558 162 58 1 102
Mar 09 Qtr 302 644 102 54 1 102
YTD Jun 09 1 262 2 500 474 114 4 350
Total Jun 09 Qtr 988 558 193 58 1 797
Mar 09 Qtr 1 003 644 134 54 1 835
YTD Jun 09 4 027 2 500 1 063 114 7 704
Cash operating costs (US$ per oz)
Underground Jun 09 Qtr 1 048 - 2 983 - 1 144
Mar 09 Qtr 770 - 3 058 - 852
YTD Jun 09 878 - 1 287 - 942
Surface Jun 09 Qtr 365 682 723 2 313 673
Mar 09 Qtr 303 529 795 1 067 521
YTD Jun 09 337 578 778 2 077 566
Total Jun 09 Qtr 824 682 1 086 2 313 855
Mar 09 Qtr 630 529 1 336 1 067 653
YTD Jun 09 709 578 1 060 2 077 730
Cash operating costs (ZAR per kg)
Underground Jun 09 Qtr 289 816 - 809 968 - 313 017
Mar 09 Qtr 247 907 - 978 094 - 279 784
YTD Jun 09 255 517 - 361 141 - 274 066
Surface Jun 09 Qtr 100 799 187 314 197 173 629 707 186 611
Mar 09 Qtr 98 142 169 651 254 627 341 833 166 357
YTD Jun 09 98 124 168 034 222 430 582 825 164 549
Total Jun 09 Qtr 227 831 187 314 295 601 629 707 235 499
Mar 09 Qtr 202 814 169 651 427 396 341 833 211 666
YTD Jun 09 206 192 168 034 299 289 582 825 212 228
Cash operating costs (ZAR per tonne))
Underground Jun 09 Qtr 1 266 - 412 - 1 021
Mar 09 Qtr 1 182 - 1 361 - 1 206
YTD Jun 09 1 172 - 1 156 - 1 168
Surface Jun 09 Qtr 38 74 75 24 49
Mar 09 Qtr 37 70 76 24 53
YTD Jun 09 36 64 74 29 52
Total Jun 09 Qtr 222 74 117 24 95
Mar 09 Qtr 215 70 157 24 107
YTD Jun 09 206 64 197 29 113
Gold and silver revenue (US$ million)
Jun 09 Qtr 28.7 15.3 4.6 1.0 49.6
Mar 09 Qtr 29.7 19.1 4.0 1.5 54.3
YTD Jun 09 112.6 68.5 28.4 2.6 212.1
Cash operating profit/(loss)(US$ million)
Jun 09 Qtr 2.5 3.1 (2.2) (3.4) -
Mar 09 Qtr 9.4 8.2 (1.8) (0.3) 15.5
YTD Jun 09 20.8 22.1 (7.9) (5.1) 29.9
Gold and silver revenue (ZAR million)
Jun 09 Qtr 244.2 128.9 38.9 8.7 420.7
Mar 09 Qtr 293.4 188.6 39.5 15.0 536.5
YTD Jun 09 1 018.5 620.1 247.9 24.2 1 910.7
Cash operating profit/(loss)(ZAR million)
Jun 09 Qtr 19.2 24.4 (18.3) (27.8) (2.5)
Mar 09 Qtr 90.0 79.3 (17.7) (3.5) 148.1
YTD Jun 09 188.2 200.0 (70.2) (42.3) 275.7
Cash expenditure (US$ million)
Jun 09 Qtr 2.8 1.0 - 10.2 14.0
Mar 09 Qtr 2.6 1.0 (0.2) 3.1 6.5
YTD Jun 09 10.7 4.8 2.8 20.8 39.1
Capital expenditure (ZAR million)
Jun 09 Qtr 24.0 7.9 - 85.4 117.3
Mar 09 Qtr 26.6 10.2 (1.8) 30.8 65.8
YTD Jun 09 97.2 43.1 25.9 178.8 345.0
The disclosures of the different operations will also form the basis on which
the operating segments will be disclosed in the annual report in accordance
with IFRS 8 (Operating Segments), which the company has early adopted at year
end.
CASH OPERATING COSTS RECONCILIATION
CONTINUING OPERATIONS (R000 unless otherwise stated)
Blyvoor Crown ERPM ErgoGold* Total
Total cash costs
Jun 09 Qtr 242 879 129 844 54 651 37 719 465 093
Mar 09 Qtr 222 494 119 729 63 105 23 866 429 194
YTD Jun 09 869 083 472 525 370 609 65 415 1777 632
Movement in gold in process
Jun 09 Qtr (11 485) 4 547 4 949 5 787 3 798
Mar 09 Qtr (12 416) (2 040) (1 019) (2 698) (18 173)
YTD Jun 09 (9 445) 3 659 1 573 11 233 7 020
Less: Production taxes, rehabilitation and other
Jun 09 Qtr 2 459 21 140 (2 034) 4 796 26 361
Mar 09 Qtr 2 675 4 684 2 257 2 449 12 065
YTD Jun 09 12 583 36 120 6 765 7 685 63 153
Less: Retrenchment costs
Jun 09 Qtr - - 1 - 1
Mar 09 Qtr - - (1 289) - (1 289)
YTD Jun 09 - - 30 681 - 30 681
Less: Corporate and general administration costs
Jun 09 Qtr 3 838 8 730 4 582 2 187 19 337
Mar 09 Qtr 3 981 3 750 3 847 260 11 838
YTD Jun 09 16 719 19 980 16 592 2 521 55 812
Cash operating costs
Jun 09 Qtr 225 097 104 521 57 051 36 523 423 192
Mar 09 Qtr 203 422 109 255 57 271 18 459 388 407
YTD Jun 09 830 336 420 084 318 144 66 442 1635 006
Gold produced (kg)
Jun 09 Qtr 988 558 193 58 1 797
Mar 09 Qtr 1 003 644 134 54 1 835
YTD Jun 09 4 027 2 500 1 063 114 7 704
Total cash operating costs - R/kg
Jun 09 Qtr 227 831 187 314 295 601 629 707 235 499
Mar 09 Qtr 202 814 169 651 427 396 341 833 211 666
YTD Jun 09 206 192 168 034 299 289 582 825 212 228
Total cash operating costs - US$/oz
Jun 09 Qtr 824 682 1 086 2 313 855
Mar 09 Qtr 630 529 1 336 1 067 653
YTD Jun 09 709 578 1 060 2 077 730
* With effect from 1 April 2009, ErgoGold represents DRDGOLD`s 100% share of
the Elsburg Joint Venture and 50% in the Ergo Joint Venture.
DIRECTORS - (*British)(**American)
Executive:
DJ (Niel) Pretorius (Chief Executive Officer)
CC Barnes (Chief Financial Officer)
Non-executives:
J Turk **
Independent non-executives:
GC Campbell*(Non-Executive Chairman); RP Hume; EA Jeneker
Company Secretary:
TJ Gwebu
INVESTOR RELATIONS
For further information, contact Niel Pretorius 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
20 August 2009
Sponsor
QuestCo Sponsors (Pty) Limited
Date: 20/08/2009 08:00:01 Produced by the JSE SENS Department.
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