| Tue 14 Feb 2012, 8:00 | | DRD - Drdgold Limited - Report to shareholders for the 2nd quarter and six |
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DRD
DRDD
DRD - Drdgold Limited - Report to shareholders for the 2nd quarter and six
months ended 31 December 2011
DRDGOLD LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1895/000926/06)
JSE trading symbol: DRD
ISIN: ZAE 000058723
Issuer code: DUSM
NYSE trading symbol: DRD
("DRDGOLD" or "the Group")
REPORT TO SHAREHOLDERS FOR THE 2nd QUARTER AND SIX MONTHS ENDED 31 DECEMBER
2011
GROUP RESULTS
KEY FEATURES FOR THE QUARTER
- Gold production steady
- Cash operating unit costs down 2%
- Net profit up 99% to R165.1 million
- Headline earnings up 66% to R125.3 million
- Net cash inflow from operations up 107% to R243.9 million
- Agreement concluded for the sale of Blyvoor
KEY RESULTS SUMMARY
GROUP Quarter Quarter % Quarter
Dec 2011 Sep 2011 Change Dec 2010
Gold production
Continuing operations oz 33 983 34 562 (2) 36 845
kg 1 057 1 075 (2) 1 146
Discontinued operations oz 29 676 29 000 2 32 601
kg 923 902 2 1 014
Group oz 63 659 63 562 - 69 446
kg 1 980 1 977 - 2 160
Gold production sold
Continuing operations oz 33 983 36 523 (7) 36 845
kg 1 057 1 136 (7) 1 146
Discontinued operations oz 29 676 29 000 2 32 601
kg 923 902 2 1 014
Group oz 63 659 65 523 (3) 69 446
kg 1 980 2 038 (3) 2 160
Cash operating costs
Continuing operations US$/oz 1 010 1 141 (11) 928
ZAR/kg 263 569 260 189 1 206 866
Discontinued operations US$/oz 1 245 1 502 (17) 1 145
ZAR/kg 326 677 342 642 (5) 255 208
Group US$/oz 1 118 1 305 (14) 1 030
ZAR/kg 292 988 297 808 (2) 229 560
Gold price received US$/oz 1 679 1 734 (3) 1 358
ZAR/kg 437 316 395 568 11 303 495
Capital expenditure US$ million 11.5 9.9 16 11.1
ZAR million 84.4 77.9 8 77.6
GROUP 6 mths to 6 mths to % 6 mths to
Dec 2011 Dec 2010 Change Jun 2011
Gold production
Continuing operations oz 68 545 71 825 (5) 72 240
kg 2 132 2 234 (5) 2 247
Discontinued operations oz 58 676 62 888 (7) 58 226
kg 1 825 1 956 (7) 1 811
Group oz 127 221 134 713 (6) 130 466
kg 3 957 4 190 (6) 4 058
Gold production sold
Continuing operations oz 70 506 73 272 (4) 70 311
kg 2 193 2 279 (4) 2 187
Discontinued operations oz 58 676 65 781 (11) 58 226
kg 1 825 2 046 (11) 1 811
Group oz 129 182 139 053 (7) 128 537
kg 4 018 4 325 (7) 3 998
Cash operating costs
Continuing operations US$/oz 1 076 949 13 1 000
ZAR/kg 261 864 217 895 20 219 835
Discontinued operations US$/oz 1 372 1 179 16 1 411
ZAR/kg 334 568 270 840 24 310 424
Group US$/oz 1 211 1 056 15 1 183
ZAR/kg 295 396 242 611 22 260 263
Gold price received US$/oz 1 707 1 288 33 1 463
ZAR/kg 416 141 295 766 41 321 694
Capital expenditure US$ million 21.4 19.2 11 26.1
ZAR million 162.3 137.0 18 178.8
STOCK
ISSUED CAPITAL
385 383 767 ordinary no par value shares
5 000 000 cumulative preference shares
Total ordinary no par value shares issued and committed: 411 026 529
STOCK TRADED JSE NASDAQ* NYSE*
Avg.volume for the quarter per day (000) 1 211 1 121 699
% of issued stock traded (annualised) 82 76 47
Price - High R5.95 US$0.727 US$0.557
- Low R3.66 US$0.493 US$0.543
- Close R4.60 US$0.559 US$0.543
**
*This data represents per share data and not per American Depositary
Share("ADS") data - one ADS reflects ten ordinary shares.
**Share data as at 29 December 2011 - the last date of trading on the
NASDAQ.
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 limitation, those described in the section
entitled `Risk Factors` included in the annual report for the fiscal year
ended 30 June 2011 which was filed with the United States Securities and
Exchange Commission on 28 October 2011 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. Any forward-looking statements included in this
report have not been reviewed and reported on by DRDGOLD`s auditors.
OVERVIEW
Dear shareholder
I am pleased to report that our operations did well to maintain gold
production during the quarter under review. The "settling in" at various
points in the Ergo circuit throughout the quarter - with new reclamation
sites coming on stream and the ongoing integration of the remaining Crown
operations into the Ergo circuit through the new Crown/Ergo pipeline - went
better than anticipated. We experienced less volatility in volume flow than
expected and production was stable.
It is also pleasing to report that the quarter was fatality-free, and at
Ergo no accidents resulting in injury occurred.
Another highlight for us was the transfer of our United States ("US")
listing from NASDAQ to the New York Stock Exchange ("NYSE"). In so doing,
we look forward to leveraging the NYSE`s considerable knowledge and
experience of the US investing community to create a better understanding
of DRDGOLD`s investment proposition, resulting in more active participation
in our ADR programme and thus, appreciation in its value.
Production
Q2 2012 v Q1 2012
Total gold production was virtually unchanged at 63 659oz, a 2% increase in
production at Blyvoor offsetting a 2% decline in production at Ergo.
Q2 2012 v Q2 2011
Total gold production was down from the 69 446oz attained in the comparable
quarter of FY2011, the reasons for which are described below.
Financial
Q2 2012 v Q1 2012
After accounting for cash operating unit costs, 2% lower at R292 988/kg,
net profit was approximately double at R165.1 million, as a consequence of
an 11% increase in the average Rand gold price received to R437 316/kg.
Headline earnings per share were 65% higher at 33 South African cents.
Q2 2012 v Q2 2011
Net profit was almost 300% up from R41.7 million in the comparable quarter
of FY2011, with operations taking full benefit of the considerable rise in
the gold price. Headline earnings per share were up 267% from nine South
African cents per share.
Detailed operational review
Continuing operations (Ergo)
Q2 2012 v Q1 2012
Gold production was 2% lower at 33 983oz, reflecting both downtime during
the quarter at the Knights Plant and a slight drop in the average yield.
Unscheduled maintenance and repairs to a thickener interrupted production
at Knights for approximately 14 days. Throughput was stable at
5 234 000t.
Cash operating unit costs were 1% higher at R263 569/kg due to lower gold
production. Cash operating profit rose by 21% to R188.7 million.
As the Crown/Ergo pipeline neared completion, capital investment declined
by 21% to R45.7 million.
Q2 2012 v Q2 2011
Gold production for the quarter under review was 33 983oz compared with 36
845oz for the comparable quarter in FY2011. This was mainly as a
consequence of a drop in yield from the higher-volume slimes dams we are
now targeting. Our aim is to increasingly offset lower grade with higher
volumes. Throughput was 9% higher at 5 234 000t (Q2 2011: 4 793 000t).
Cash operating unit costs were higher at R263 569/kg, up from R206 866/kg
in Q2 2011. This was as a consequence of the lower ounces produced and the
increase in tonnage. Operating profit was 73% higher at R188.7 million (Q2
2011: R109.4 million).
Discontinued operation - Blyvooruitzicht Gold Mining Company Limited
("Blyvoor")
Q2 2012 v Q1 2012
Total gold production was 2% higher at 29 676oz due to a 7% increase in
gold production from underground to 23 117oz.
Higher underground gold production resulted from an improvement of 4% in
underground throughput to 191 000t and maintenance of the underground yield
at 3.76g/t.
Gold production from surface sources was lower at 6 559oz, reflecting a 17%
decline in the average surface yield to 0.25g/t. Surface throughput was 2%
higher at 801 000t. The lower average surface yield resulted both from
diminishing recovery of higher-grade material from clean-up operations and
from the lower yields of the No 4 and 5 Dams, both of which are nearing
depletion.
Total cash operating unit costs were 5% lower at R326 677/kg. Surface cash
operating unit costs increased by 18% to R156 113/kg. Underground cash
operating unit costs were 10% lower at R375 071/kg, reflecting the increase
in underground gold production. Cash operating profit was 114% higher at
R98.6 million, a consequence of both improved total production and the
higher average Rand gold price received.
Capital expenditure doubled to R33.2 million. This signals a return to
normal capex levels following the lifting of the business rescue process,
during which time capital expenditure was curtailed. Most capex during the
quarter was directed towards opening up and development.
Q2 2012 v Q2 2011
Total gold production in the quarter under review was 9% lower than the 32
601oz attained in the comparable quarter of FY2011. The primary
contributors to this are declines in both the average underground yield and
the average surface yield, the former by 9%, to 3.76g/t, and the latter by
24% to 0.25g/t.
Total cash operating unit costs rose by 28% to R326 677/kg. Underground
cash operating costs increased by 25% to R375 071/kg and surface cash
operating costs by 35% to R156 113/kg.
Cash operating profit rose by 133% from R42.2 million to R98.6 million.
Capital investment increased by 54%, from R21.6 million to R33.2 million.
Curtailment of production from Blyvoor`s low-grade 4 and 6 Shafts
Blyvoor`s number 5 shaft responded well to measures decided during the
business rescue process. Number 4 and 6 shafts, used mainly for underground
water pumping however, did not and were unable to reverse the progressive
worsening of recovery grades which were recorded from approximately April
2011, and are both still significantly below cut off recovery grade.
Therefore DRDGOLD announced last week that the Blyvoor Board of Directors
had resolved to discontinue mining operations at the two shafts. Blyvoor
has given notice in terms of Section 189 (3) of the Labour Relations Act to
organised labour to enter a 60-day consultation process regarding this.
Disposal of shares and claims in Blyvoor to Village
Yesterday DRDGOLD announced that it has entered into a sale of shares and
claims agreement with Village Main Reef Limited ("Village") in respect of
DRDGOLD`s 74% interest in Blyvoor.
This follows an announcement on 8 November 2011, advising that DRDGOLD had
received and accepted a non-binding expression of interest ("EOI") from
Village in terms of which Village had expressed an interest in acquiring
DRDGOLD`s entire interest in Blyvoor.
In terms of the agreement announced yesterday, DRDGOLD has agreed to sell
to Village its entire shareholding in Blyvoor and its working capital and
shareholder loan claims against Blyvoor.
The purchase consideration will be settled by Village through the issue of
85 714 286 new ordinary shares in Village. The current value of the
consideration shares, calculated with reference to the 30 day volume
weighted average price ("VWAP") per Village Share up until and including
Friday, 10 February 2012, is approximately R192 million.
The sale is conditional on:
- the conclusion of the sale to Blyvoor by AngloGold Ashanti Limited
("AGA") of a portion of AGA`s Savuka Mine, to the satisfaction of Village,
by 30 May 2012;
- the approval - or conditional approval on terms acceptable to DRDGOLD and
Village - by the South African Competition Authorities;
- conversion by the Department of Mineral Resources ("DMR") of Blyvoor`s
old order mining right to a new order mining right; and
- approval on terms acceptable to DRDGOLD and Village - by the DMR of the
transfer of DRDGOLD`s interest in Blyvoor to Village in terms of Section 11
of the Mineral and Petroleum Resources Development Act ("MPRDA").
Zimbabwe
During the quarter, the focus remained on drilling at the KT Target at
Gweru and interpreting additional geochem reports in respect of the Leny,
Ascot and John Bull prospects at Norton. Follow-up geochem surveys on a
smaller grid, together with trenching, will now follow.
Looking ahead
Crown/Ergo Integration - Over the next few months, we intend to fully bed
down the Crown/Ergo integration, and get to work on optimising the output
of these circuits. We expect that we can now leverage the considerable
competitive advantage offered by our extensive resource, plant
infrastructure and strategic surface holdings in order to grow our 11
million ounces surface resource even further and thus extend the life of
Ergo.
Fine-Grind Circuit - The DRDGOLD Board of Directors has given the go-ahead
for the incorporation of a flotation and fine-grind circuit into Ergo`s
Brakpan plant. Simply stated, flotation will separate from the total feed
to the Brakpan plant the higher fraction pyrite particles in which more
than 40% of the gold which does not respond to our metallurgical process is
embedded. This material, a concentrate of roughly 4% of total run of mine,
is then fine-ground to liberate between 16-20% more gold. The total cost of
refurbishing the existing Ergo flotation plant and constructing the fine-
grind section is an estimated R250 million. The business case for this
improvement is compelling.
East Rand Exploration - We expect a Competent Person`s Report on the ERPM
extension 1 and 2 prospect to be completed by the end of February 2011. The
board has now also resolved to develop this resource further through
additional drilling to take it to the South African Code for Reporting of
Exploration Results, Mineral Resources and Mineral Reserves (SAMREC) and
Joint Ore Reserves Committee (JORC) compliant level of confidence. In order
to create more market awareness of the potential of the resource, we will
decide the appropriate commercial model for it, with the possibility to
create a separate investment opportunity for investors.
NOTE REGARDING FINANCIAL INFORMATION
The condensed consolidated financial statements are prepared in accordance
with the recognition and measurement principles of International Financial
Reporting Standards ("IFRS") and presented in accordance with the minimum
content, including disclosures, prescribed by IAS 34 Interim Financial
Reporting, and South African Statements and interpretations of Generally
Accepted Accounting Practice (AC 500 Series). The accounting policies
adopted are in line with IFRS and are consistent with those applied in the
annual financial statements for the year ended 30 June 2011.
CONDENSED CONSOLIDATED Quarter Quarter Quarter
Statement of comprehensive income Dec 2011 Sep 2011 Dec 2010
R m R m R m
Unaudited Unaudited Unaudited
Continuing operations
Gold and silver revenue 462.8 449.6 348.2
Net operating costs (274.1) (293.1) (238.8)
Cash operating costs (278.6) (279.7) (237.0)
Movement in gold in process 4.5 (13.4) (1.8)
Operating profit 188.7 156.5 109.4
Depreciation (30.6) (27.2) (27.0)
Movement in provision for
environmental rehabilitation (6.0) (7.1) (4.5)
Net operating profit 152.1 122.2 77.9
Environmental rehabilitation costs (9.3) (14.5) 0.3
Corporate, administration and
other expenses (31.1) (21.5) (24.9)
Share-based payments (1.3) (0.4) (1.2)
Net loss on financial liabilities
measured at amortised costs (6.8) (0.3) (1.0)
Loss on disposal of assets - - (2.7)
Finance income 5.4 5.4 7.8
Finance expenses (1.5) (4.5) (6.4)
Profit before taxation 107.5 86.4 49.8
Income tax (8.6) (5.8) (2.1)
Deferred tax (25.8) (34.6) (25.6)
Profit after taxation 73.1 46.0 22.1
Discontinued operations (Note 1)
Profit for the period from
discontinued operations 92.0 37.1 19.6
Net profit for the period 165.1 83.1 41.7
Attributable to:
Equity owners of the parent 125.3 75.4 31.6
Non-controlling interest 39.8 7.7 10.1
165.1 83.1 41.7
Other comprehensive income
Foreign exchange translation (0.6) (2.6) -
Total comprehensive income for
the period 164.5 80.5 41.7
Attributable to
Equity owners of the parent 124.7 72.8 31.6
Non-controlling interest 39.8 7.7 10.1
164.5 80.5 41.7
Reconciliation of headline earnings
Net profit 125.3 75.4 31.6
Adjusted for
Loss on disposal of assets - - 2.7
Non-controlling interest in headline
earnings adjustment - - (0.7)
Headline earnings 125.3 75.4 33.6
Headline earnings per share-cents
- From continuing operations 15 12 5
- From total operation 33 20 9
Basic earnings per share-cents
- From continuing operations 15 12 4
- From total operations 33 20 8
Diluted headline earnings
per share-cents 33 20 9
Diluted basic earnings
per share-cents 33 20 8
Calculated on the weighted average
ordinary shares issued of: 385 173 763 384 884 379 384 884 379
CONDENSED CONSOLIDATED 6 months to 6 months to 6 months to
Statement of comprehensive 31 Dec 2011 31 Dec 2010 30 Jun 2011
income R m R m R m
Unaudited Unaudited Unaudited
Continuing operations
Gold and silver revenue 912.4 674.8 704.6
Net operating costs (567.2) (499.5) (473.0)
Cash operating costs (558.3) (486.7) (494.0)
Movement in gold in process (8.9) (12.8) 21.0
Operating profit 345.2 175.3 231.6
Depreciation (57.8) (46.5) (50.0)
Movement in provision for
environmental rehabilitation (13.1) (9.0) (37.9)
Retrenchment costs - (0.4) (0.4)
Net operating profit 274.3 119.4 143.3
Reversal of impairments - - 30.9
Environmental rehabilitation costs (23.8) 0.6 0.9
Corporate, administration and
other expenses (52.6) (50.7) (81.3)
Share-based payments (1.7) (1.8) (1.7)
Net (loss)/gain on financial liabilities
measured at amortised costs (7.1) (12.7) 2.5
Profit on disposal of assets - 1.7 1.6
Finance income 10.8 12.5 10.7
Finance expenses (6.0) (9.6) (2.9)
Profit/(loss) before taxation 193.9 59.4 104.0
Income tax (14.4) (5.7) (0.6)
Deferred tax (60.4) (31.7) 8.3
Profit/(loss) after taxation 119.1 22.0 111.7
Discontinued operations (Note 1)
Profit for the period from
discontinued operations 129.1 11.4 18.1
Impairments from discontinued operations - - (578.6)
Net profit/(loss) for the period 248.2 33.4 (448.8)
Attributable to:
Equity owners of the parent 200.7 31.9 (319.8)
Non-controlling interest 47.5 1.5 (129.0)
248.2 33.4 (448.8)
Other comprehensive income
Foreign exchange translation (3.2) - 0.8
Mark-to-market of available-for-sale
investments - - 0.3
Total comprehensive income for
the period 245.0 33.4 (447.7)
Attributable to
Equity owners of the parent 197.5 31.9 (318.8)
Non-controlling interest 47.5 1.5 (128.9)
245.0 33.4 (447.7)
Reconciliation of headline earnings
Net profit/(loss) 200.7 31.9 (319.8)
Adjusted for
Impairments - - 547.7
Profit on disposal of assets - (1.7) (1.6)
Non-controlling interest in headline
earnings adjustment - 0.4 (149.2)
Headline earnings 200.7 30.6 77.1
Headline earnings per share-cents
- From continuing operations 27 6 17
- From total operations 52 8 20
Basic earnings/(loss) per share-cents
- From continuing operations 27 6 25
- From total operations 52 8 (83)
Diluted headline earnings
per share-cents 52 8 20
Diluted basic earnings/(loss)
per share-cents 52 8 (83)
Calculated on the weighted average
ordinary shares issued of: 385 029 071 384 884 379 384 884 379
CONDENSED CONSOLIDATED As at As at As at As at
Statement of 31 Dec 2011 30 Sep 2011 30 Jun 2011 31 Dec 2010
financial position R m R m R m R m
Unaudited Unaudited Reviewed Unaudited
Assets
Non-Current assets 1 731.4 1 817.4 1 778.6 2 212.9
Property,plant and equipment 1 570.4 1 599.0 1 550.1 1 939.0
Non-current investments and
other assets 10.8 25.1 25.1 24.8
Environmental rehabilitation
trust funds 103.4 136.0 134.2 131.1
Deferred tax 46.8 57.3 69.2 118.0
Current assets 716.8 599.8 510.0 446.4
Inventories 89.7 115.1 122.9 101.2
Trade and other receivables 92.0 190.8 128.0 96.5
Cash and cash equivalents 320.9 293.9 259.1 233.7
Assets classified as held
for sale (Note 1) 214.2 - - 15.0
Total assets 2 448.2 2 417.2 2 288.6 2 659.3
Equity and Liabilities
Equity 1 439.0 1 271.2 1 219.2 1 665.5
Equity of the owners
of the parent 1 419.6 1 291.6 1 247.3 1 564.7
Non-controlling interest 19.4 (20.4) (28.1) 100.8
Non-current liabilities 622.5 689.5 659.4 705.5
Loans and borrowings (Note 2) - 40.0 40.4 71.9
Post retirement and other
employee benefits 5.8 6.4 6.3 13.8
Provision for environmental
rehabilitation 456.2 497.8 490.2 438.4
Deferred tax 160.5 145.3 122.5 181.4
Current liabilities 386.7 456.5 410.0 288.3
Trade and other payables 209.1 375.8 330.7 209.8
Loans and borrowings (Note 2) 30.5 80.7 79.3 78.5
Liabilities classified
as held for sale (Note 1) 147.1 - - -
Total equity and liabilities 2 448.2 2 417.2 2 288.6 2 659.3
CONDENSED CONSOLIDATED Quarter Quarter Quarter
Statement of changes in equity Dec 2011 Sep 2011 Dec 2010
R m R m R m
Unaudited Unaudited Unaudited
Balance at the beginning of
the period 1 271.2 1 219.2 1 622.6
Share capital issued 1.8 - -
for share options exercised 1.8 - -
Increase in share-based
payment reserve 1.5 0.4 1.2
Net profit attributed to
equity owners of the parent 125.3 75.4 31.6
Net profit attributed to
non-controlling interest 39.8 7.7 10.1
Dividends declared - (28.9) -
Other comprehensive income (0.6) (2.6) -
Balance as at the end of the
period 1 439.0 1 271.2 1 665.5
CONDENSED CONSOLIDATED 6 months to 6 months to 6 months to
Statement of changes in equity 31 Dec 2011 31 Dec 2010 30 Jun 2011
R m R m R m
Unaudited Unaudited Unaudited
Balance at the beginning of
the period 1 219.2 1 649.9 1 665.5
Share capital issued 1.8 (0.4) (0.3)
for share options exercised 1.8 - -
for costs - (0.4) (0.3)
Increase in share-based
payment reserve 1.9 1.8 1.7
Net profit/(loss) attributed to
equity owners of the parent 200.7 31.9 (319.8)
Net(loss)/profit attributed to
non-controlling interest 47.5 1.5 (129.0)
Dividends declared (28.9) (19.2) -
Other comprehensive income (3.2) - 1.1
Balance as at the end of the
period 1 439.0 1 665.5 1 219.2
CONDENSED CONSOLIDATED Quarter Quarter Quarter
Statement of cash flows Dec 2011 Sep 2011 Dec 2010
R m R m R m
Unaudited Unaudited Unaudited
Net cash inflow from operations 243.9 117.9 78.6
Net cash out flow
from investing activities (89.2) (83.1) (80.3)
Net cash (out)/inflow from
financing activities (119.4) - 88.8
Loans and other (73.3) - 108.0
Dividends paid to owners of the
parent (28.9) - (19.2)
Dividends paid to non-controlling
interest holders (17.2) - -
Increase in cash and cash equivalents 35.3 34.8 87.1
Opening cash and cash equivalents 293.9 259.1 146.6
Closing cash and cash equivalents 329.2 293.9 233.7
Cash classified as assets held for
sale included in the closing balance 8.3 - -
Reconciliation of net cash inflow from operations
Profit before taxation 107.5 86.4 49.8
Profit from discontinued operations 92.0 37.1 28.3
199.5 123.5 78.1
Adjusted for:
Movement in gold process (1.5) 14.9 8.3
Depreciation and impairments 31.7 27.8 35.7
Movement in provision for
environmental rehabilitation 4.6 7.3 4.7
Share-based payments 1.5 0.4 1.2
Net loss on financial liabilities
measured at amortised cost 6.8 0.3 1.9
Loss on disposal of assets - - 2.7
Finance expenses and unwinding of
provisions 2.9 2.7 3.0
Growth in environmental trust funds (1.9) (1.7) (1.9)
Other non-cash items (1.2) (1.7) 0.3
Taxation paid (8.5) - (5.8)
Working capital changes 10.0 (55.6) (49.6)
Net cash inflow from operations 243.9 117.9 78.6
CONDENSED CONSOLIDATED 6 months to 6 months to 6 months to
Statement of cash flows 31 Dec 2011 31 Dec 2010 30 Jun 2011
R m R m R m
Unaudited Unaudited Unaudited
Net cash inflow from operations 361.8 100.5 223.4
Net cash out flow
from investing activities (172.3) (135.3) (199.8)
Net cash in/(out)flow from
financing activities (119.4) 80.3 1.0
Loans and other (73.3) 131.2 1.0
Dividends paid to owners of the
parent (28.9) (19.2) -
Dividends paid to non-controlling
interest holders (17.2) (31.7) -
Increase/(decrease) in cash and
cash equivalents 70.1 45.5 24.6
Translation adjustment - - 0.8
Opening cash and cash equivalents 259.1 188.2 233.7
Closing cash and cash equivalents 329.2 233.7 259.1
Cash classified as assets held for
sale included in the closing balance 8.3 - -
Reconciliation of net cash inflow from operations
Profit before taxation 193.9 59.4 104.0
Profit/(loss) from discontinuing
operations 129.1 15.7 (562.3)
323.0 75.1 (458.3)
Adjusted for:
Movement in gold process 13.4 41.8 (26.2)
Depreciation and impairments 59.5 63.3 615.3
Movement in provision for
environmental rehabilitation 11.9 9.5 43.1
Share-based payments 1.9 1.8 1.7
Net loss/(profit) on financial liabilities
measured at amortised cost 7.1 14.5 (31.6)
Profit on disposal of assets - (1.7) (1.6)
Finance expenses and unwinding of
provisions 5.6 6.0 3.4
Growth in environmental trust funds (3.6) (3.9) (4.5)
Other non-cash items (2.9) (1.1) (13.2)
Taxation paid (8.5) (5.8) (0.4)
Working capital changes (45.6) (99.0) 95.7
Net cash inflow from operations 361.8 100.5 223.4
Notes to the financial statements
Discontinued operations and assets classified as held for sale
On 8 November 2011, DRDGOLD announced the acceptance of an EOI from Village
for the acquisition of DRDGOLD`s entire interest in and claims against
Blyvoor for R1 and 85 714 286 new ordinary shares of Village which closed
on R2.16 per share on Friday 10 February 2012.
Results from discontinued Quarter Quarter Quarter
operations Dec 2011 Sep 2011 Dec 2010
R m R m R m
Unaudited Unaudited Unaudited
Gold and silver revenue 403.1 356.6 307.4
Net operating costs (304.5) (310.6) (265.3)
Operating profit 98.6 46.0 42.1
Depreciation (1.1) (0.6) (8.7)
Movement in provision for
environmental rehabilitation 1.4 (0.2) (0.2)
Net operating profit 98.9 45.2 33.2
Other (6.9) (8.1) (4.9)
Profit/(loss) before taxation 92.0 37.1 28.3
Taxation - - (8.7)
Profit/(loss) after taxation 92.0 37.1 19.6
Cash flow from discontinued operations
Net cash generated by operating
activities 93.7 20.9 38.9
Net cash used in investing activities (33.2) (16.6) (21.6)
Net cash from financing activities - - -
Net cash from the period 60.5 4.3 17.3
6 months to 6 months to 6 months to
31 Dec 2011 31 Dec 2010 30 Jun 2011
R m R m R m
Unaudited Unaudited Unaudited
Gold and silver revenue 759.7 604.4 581.5
Net operating costs (615.1) (558.8) (557.0)
Operating profit 144.6 45.6 24.5
Depreciation (1.7) (16.8) (17.6)
Movement in provision for
environmental rehabilitation 1.2 (0.5) (5.2)
Net operating profit 144.1 28.3 1.7
Impairments - - (578.6)
Other (15.0) (12.6) 14.6
Profit/(loss) before taxation 129.1 15.7 (562.3)
Taxation - (4.3) 1.8
Profit/(loss) after taxation 129.1 11.4 (560.5)
Cash flow from/(used in) discontinued operations
Net cash generated by operating
activities 114.6 46.5 17.7
Net cash used in investing activities (49.8) (40.7) (53.6)
Net cash from financing activities - - -
Net cash from/(used for) the period 64.8 5.8 (35.9)
2. Loans and borrowings
Included in loans and borrowings is a R500 million Domestic Medium Term
Note Programme ("DMTN Programme") under which DRDGOLD may from time to time
issue notes. R108 million was issued on 1 October 2010, consisting of R78
million and R30 million respectively, under the DMTN Programme and the
different notes issued mature 12 and 24 months from the date of issue and
bear interest at the three month Johannesburg Inter-bank Acceptance Rate
plus a margin ranging from 4% to 5% per annum. The DMTN Programme is
unsecured. During the quarter under review DRDGOLD repaid the amount of R78
million.
KEY OPERATING AND FINANCIAL RESULTS (Unaudited)
OPERATIONS Metric Metric Metric
Continuing Discontinued Total
operations operations* operations
(Metric)
Ore milled (`000t)
Underground Dec 11 Qtr - 191 191
Sep 11 Qtr - 184 184
Dec 11 Ytd - 375 375
Surface Dec 11 Qtr 5 234 801 6 035
Sep 11 Qtr 5 231 783 6 014
Dec 11 Ytd 10 465 1 584 12 049
Total Dec 11 Qtr 5 234 992 6 226
Sep 11 Qtr 5 231 967 6 198
Dec 11 Ytd 10 465 1 959 12 424
Yield (g/t)
Underground Dec 11 Qtr - 3.76 3.76
Sep 11 Qtr - 3.64 3.64
Dec 11 Ytd - 3.70 3.70
Surface Dec 11 Qtr 0.20 0.25 0.21
Sep 11 Qtr 0.21 0.30 0.22
Dec 11 Ytd 0.20 0.28 0.21
Total Dec 11 Qtr 0.20 0.93 0.32
Sep 11 Qtr 0.21 0.93 0.32
Dec 11 Ytd 0.20 0.93 0.32
Gold Produced (kgs)
Underground Dec 11 Qtr - 719 719
Sep 11 Qtr - 669 669
Dec 11 Ytd - 1 388 1 388
Surface Dec 11 Qtr 1 057 204 1 261
Sep 11 Qtr 1 075 233 1 308
Dec 11 Ytd 2 132 437 2 569
Total Dec 11 Qtr 1 057 923 1 980
Sep 11 Qtr 1 075 902 1 977
Dec 11 Ytd 2 132 1 825 3 957
Cash operating costs (ZAR per kg)
Underground Dec 11 Qtr - 375 071 375 071
Sep 11 Qtr - 415 913 415 913
Dec 11 Ytd - 394 756 394 756
Surface Dec 11 Qtr 263 569 156 113 246 186
Sep 11 Qtr 260 189 132 262 237 401
Dec 11 Ytd 261 864 143 396 241 713
Total Dec 11 Qtr 263 569 326 677 292 988
Sep 11 Qtr 260 189 342 642 297 808
Dec 11 Ytd 261 864 334 568 295 396
Cash operating costs (ZAR per tonne)
Underground Dec 11 Qtr - 1 412 1 412
Sep 11 Qtr - 1 512 1 512
Dec 11 Ytd - 1 461 1 461
Surface Dec 11 Qtr 53 40 51
Sep 11 Qtr 53 39 52
Dec 11 Ytd 53 40 52
Total Dec 11 Qtr 53 304 93
Sep 11 Qtr 53 320 95
Dec 11 Ytd 53 312 94
Gold and silver revenue (ZAR million)
Dec 11 Qtr 462.8 403.1 865.9
Sep 11 Qtr 449.6 356.6 806.2
Dec 11 Ytd 912.4 759.7 1 672.1
Operating profit (ZAR million)
Dec 11 Qtr 188.7 98.6 287.3
Sep 11 Qtr 156.5 46.0 202.5
Dec 11 Ytd 345.2 144.6 489.8
Capital expenditure (ZAR million)
Dec 11 Qtr 51.2 33.2 84.4
Sep 11 Qtr 61.3 16.6 77.9
Dec 11 Ytd 112.5 49.8 162.3
OPERATIONS Imperial Imperial Imperial
Continuing Discontinued Total
operations operations* operations
Ore milledd (`000t)
Underground Dec 11 Qtr - 210 210
Sep 11 Qtr - 203 203
Dec 11 Ytd - 413 413
Surface Dec 11 Qtr 5 769 883 6 652
Sep 11 Qtr 5 764 863 6 629
Dec 11 Ytd 11 533 1 746 13 281
Total Dec 11 Qtr 5 769 1 093 6 862
Sep 11 Qtr 5 764 1 066 6 832
Dec 11 Ytd 11 533 2 159 13 694
Yield (g/t)
Underground Dec 11 Qtr - 0.110 0.110
Sep 11 Qtr - 0.106 0.106
Dec 11 Ytd - 0.108 0.108
Surface Dec 11 Qtr 0.006 0.007 0.006
Sep 11 Qtr 0.006 0.009 0.006
Dec 11 Ytd 0.006 0.008 0.006
Total Dec 11 Qtr 0.006 0.027 0.009
Sep 11 Qtr 0.006 0.027 0.009
Dec 11 Ytd 0.006 0.027 0.009
Gold Produced (kgs)
Underground Dec 11 Qtr - 23 117 23 117
Sep 11 Qtr - 21 509 21 509
Dec 11 Ytd - 44 626 44 626
Surface Dec 11 Qtr 33 983 6 559 40 542
Sep 11 Qtr 34 562 7 491 42 053
Dec 11 Ytd 68 545 14 050 82 595
Total Dec 11 Qtr 33 983 29 676 63 659
Sep 11 Qtr 34 562 29 000 63 562
Dec 11 Ytd 68 545 58 676 127 221
Cash operating costs (ZAR per kg)
Underground Dec 11 Qtr - 1 429 1 429
Sep 11 Qtr - 1 823 1 823
Dec 11 Ytd - 1 619 1 619
Surface Dec 11 Qtr 1 010 597 940
Sep 11 Qtr 1 141 580 1 041
Dec 11 Ytd 1 076 588 991
Total Dec 11 Qtr 1 010 1 245 1 118
Sep 11 Qtr 1 141 1 502 1 305
Dec 11 Ytd 1 076 1 372 1 211
Cash operating costs (ZAR per tonne)
Underground Dec 11 Qtr - 157 157
Sep 11 Qtr - 193 193
Dec 11 Ytd - 175 175
Surface Dec 11 Qtr 6 4 6
Sep 11 Qtr 7 5 7
Dec 11 Ytd 6 5 6
Total Dec 11 Qtr 6 34 10
Sep 11 Qtr 7 41 12
Dec 11 Ytd 6 37 11
Gold and silver revenue (ZAR million)
Dec 11 Qtr 57.1 49.9 107.2
Sep 11 Qtr 63.3 50.2 113.4
Dec 11 Ytd 120.4 100.1 220.6
Operating profit (ZAR million)
Dec 11 Qtr 23.4 12.6 36.0
Sep 11 Qtr 22.0 6.5 28.5
Dec 11 Ytd 45.4 19.1 64.5
Capital expenditure (ZAR million)
Dec 11 Qtr 7.3 4.2 11.5
Sep 11 Qtr 7.6 2.3 9.9
Dec 11 Ytd 14.9 6.5 21.4
CASH OPERATING COSTS RECONCILIATION
(R`000 unless otherwise stated)
OPERATIONS Continuing Discontinued Total
operations operations* operations
Total cash costs
Dec 11 Qtr 305 009 311 802 629 403
Sep 11 Qtr 369 301 318 244 650 536
Dec 11 Ytd 674 310 630 046 1 279 939
Movement in gold in process
Dec 11 Qtr 4 577 (3 041) 1 536
Sep 11 Qtr (13 427) (1 489) (14 916)
Dec 11 Ytd (8 850) (4 530) (13 380)
Less: Assessment rates, rehabilitation and other
Dec 11 Qtr 21 966 2 533 26 361
Sep 11 Qtr 67 129 3 023 31 013
Dec 11 Ytd 89 095 5 556 57 374
Less: Corporate and general administration costs
Dec 11 Qtr 9 028 4 705 24 462
Sep 11 Qtr 9 042 4 669 15 840
Dec 11 Ytd 18 070 9 374 40 302
Cash operating costs
Dec 11 Qtr 278 592 301 523 580 116
Sep 11 Qtr 279 703 309 063 588 767
Dec 11 Ytd 558 295 610 586 1 168 883
Gold produced - kg
Dec 11 Qtr 1 057 923 1 980
Sep 11 Qtr 1 075 902 1 977
Dec 11 Ytd 2 132 1 825 3 957
Total cash operating costs - R/kg
Dec 11 Qtr 263 569 326 677 292 988
Sep 11 Qtr 260 189 342 642 297 808
Dec 11 Ytd 261 864 334 568 295 396
Total cash operating costs - US$/oz
Dec 11 Qtr 1 010 1 245 1 118
Sep 11 Qtr 1 141 1 502 1 305
Dec 11 Ytd 1 076 1 372 1 211
*Discontinued operations represent Blyvoor.
There has been no material change to the technical information relating to,
inter alia, the Group`s reserves and resources, legal title to its mining
and prospecting rights and legal proceedings relating to its mining and
exploration activities as disclosed in the company`s annual report of 30
June 2011 and subsequent public announcements.
The technical information referred to in this report has been reviewed by
Mr Ryno Botha (SAIMM) - Mineral Resource Manager and a part-time employee
of the Company. He has approved this information in writing before the
publication of this report.
DIRECTORS - (*British)(**American)
Executive:
DJ (Niel) Pretorius (Chief Executive Officer)
CC Barnes (Chief Financial Officer)
Independent non-executives:
GC Campbell*(Non-Executive Chairman); RP Hume; EA Jeneker; J Turk **
Company Secretary:
TJ Gwebu
INVESTOR RELATIONS
For further information, contact Niel Pretorius at:
Tel: (+27)(0)11 470 2600, Fax: (+27) (0)11 470 2618,
website: http://www.drdgold.com
Quadrum Office Park, 50 Constantia Boulevard,
Constantia Kloof Ext 28, South Africa.
PO Box 390,
Maraisburg, 1700,
South Africa.
Roodepoort
14 February 2012
JSE LIMITED SPONSOR
One Capital
Date: 14/02/2012 08:00:01 Produced by the JSE SENS Department.
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