| Thu 27 Oct 2005, 8:00 | | Drdgold Limited - Report On Activities For The Fir |
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Drdgold Limited - Report On Activities For The First Quarter Ended 30 September
2005 Of The 2006 Financial Year
DRDGOLD LIMITED
(Formerly Durban Roodepoort Deep, Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1895/000926/06)
ARB number 086 277 616
JSE trading symbol: DRD
ISIN Code: ZAE000058723
Issuer code: DUSM
Nasdaq trading symbol: DROOY
ASX trading symbol: DRD
("DRDGOLD" or "THE COMPANY")
REPORT ON ACTIVITIES FOR THE FIRST QUARTER ENDED 30 SEPTEMBER 2005
OF THE 2006 FINANCIAL YEAR
GROUP RESULTS (Unaudited)
KEY FEATURES
Board approves extension of BEE structure
Australasian costs pressures being addressed
SA gold production up 5%
KEY RESULTS SUMMARY
GROUP Quarter Quarter % Quarter
Sep 2005 Jun 2005 Change Sep 2004
Attributable gold production(*)
Australasian operations oz 67 920 72 662 (6) 77 387
kg 2 113 2 259 (6) 2 407
South African operations oz 67 710 64 752 5 66 585
kg 2 106 2 014 5 2 071
Discontinued operations oz - - - 76 552
kg - - - 2 381
Group oz 135 630 137 414 (1) 220 524
kg 4 219 4 273 (1) 6 859
Cash operating costs
Australasian operations US$/oz 308 282 9 217
ZAR/kg 64 530 58 043 11 44 448
South African operations US$/oz 419 393 7 538
ZAR/kg 87 806 81 545 8 110 409
Discontinued operations US$/oz - - - 459
ZAR/kg - - - 94 116
Group US$/oz 356 326 9 389
ZAR/kg 74 585 67 335 11 79 892
Gold price received US$/oz 446 432 3 403
ZAR/kg 93 559 89 375 5 82 785
Capital expenditure US$ million 4.0 9.0 (56) 6.0
ZAR million 26.0 56.2 (54) 38.9
* Attributable - Including Emperor Mines Limited ("Emperor") (45.33%) and Crown
Gold Recoveries (Pty) Limited ("CGR")(40%)
STOCK
ISSUED CAPITAL
304 010 632 ordinary no par value shares
5 000 000 cumulative preference shares
Total ordinary no par value shares issued and committed: 334 391 163
STOCK TRADED JSE ASX NASDAQ FRANKFURT
Avg. volume for the quarter
per day (000) 191 8 2 518 74
% of issued stock traded
(annualised) 16% 1% 216% 7%
Price - High R10.25 A$2.26 US$1.66 Euro 1.31
- Low R 5.60 A$1.08 US$0.85 Euro 0.74
- Close R 9.25 A$1.81 US$1.38 Euro 1.17
SAFETY
We record with deep regret the death of one employee in a work-related incident
during the quarter under review. This compares with three in the previous
quarter. Mr. Enoque Matues Mapossa (37), a team leader from Manica Province in
Mozambique, died in a fall of ground at Blyvooruitzicht Gold Mining Company
Limited ("Blyvoor") on 28 September 2005. He is survived by his wife and two
children.
The Group"s Fatal Injury Frequency Rate ("FIFR") remained unchanged from the
previous quarter at 0.52 in spite of fewer fatalities, due to a reduction in the
total number of employees.
The Lost Time Injury Frequency Rate ("LTIFR") continued to show improvement - to
6.24 from 7.21 - as did the Serious Injury Frequency Rate ("SIFR") - to 2.48
from 3.60.
Overall, these results are encouraging and point to the continuing benefits
deriving from Group-wide, behaviour-based workplace training and orientation
initiatives.
PRODUCTION
Group gold production was 1% lower at 135 630 ounces ("oz"). This reflects a 6%
decline in attributable production from the Australasian operations to 67 920
oz, due mainly to continuing operational constraints at Porgera and Tolukuma
Gold Mines Limited ("Tolukuma"). Production from the South African operations
increased by 5% to 67 710 oz, reflecting a continuing process of stabilisation.
CASH OPERATING COSTS
Group cash operating unit costs were 9% higher at US$356 per ounce. Cash
operating unit costs at the Australasian operations rose 9% higher to US$308 per
ounce, reflecting lower production at Porgera and Tolukuma and higher fuel costs
affecting these operations as well as Emperor"s Vatukoula mine. The cash
operating costs of the South African operations increased by 7% to US$419 per
ounce. Contributory factors were varied and are detailed in the operation-by-
operation commentaries below.
GOLD MARKET REVIEW
The gold market moved into higher territory in both US$ and Rand terms in the
quarter under review. The US$ gold price is up more than 20% for the current
calendar year, continuing six years of upswing. In Rand terms, for the quarter
under review, the spot price was up more than 4% to around R91 950 per kilogram
on the back of a slightly weaker US$/Rand exchange rate.
Of note is that, while gold price strength over the past year has been driven by
US$ weakness, the US$ actually strengthened in the quarter, and gold rose, not
only in US$ terms, but also in terms of other currencies such as the Euro and
Swiss franc, leading us to believe that the continued strength in the gold
market is underpinned not only by US$ weakness but also by other fundamentals
such as supply/demand imbalances to which we have referred in the past.
Investment demand for both physical gold and investment continues to be
encouraging.
CORPORATE DEVELOPMENTS
In a separate announcement today, DRDGOLD announced that the Board of Directors
have approved an extension of the company"s existing black economic empowerment
("BEE") structure with Khumo Bathong Holdings (Pty) Limited ("KBH") to cover all
of DRDGOLD"s South African assets.
The transaction, facilitated by the Industrial Development Corporation of South
Africa ("IDC") which agreed to a debt restructuring in CGR held 60% and 40% by
KBH and DRDGOLD respectively, results in KBH acquiring as a first step a 15%
interest in a newly created vehicle, DRDGOLD South African Operations
(Proprietary) Limited ("DRDGOLD SA"). DRDGOLD will retain an 85% interest.
In the second step, KBH has been granted an option, exercisable over the next
three years, to acquire a further 11% in DRDGOLD SA for R9.3 million. This will
include a 6% stake to be placed in a new employee trust. The transaction has
been vendor financed by the conversion of an existing loan to KBH of R7.9
million and through the issuance of R31.8 million new KhumoGold preference
shares.
On 29 September 2005, DRDGOLD advised shareholders in a cautionary announcement
that it had entered into discussions with several parties regarding the
company"s offshore assets and that these discussions may result in a transaction
that may have a material effect on the price of the company"s securities.
At the same time, the company said it was considering a range of proposals,
which could result in the consolidation of its Australasian assets. One of these
is the possible consolidation of its interests in the Porgera Joint Venture and
the Tolukuma gold mine into Emperor.
A proposal to vend assets into Emperor had been made and was being considered by
the independent board members of Emperor. There was no guarantee that this or
any other proposal being considered by the company would proceed. Any proposal
affecting the company"s Australasian assets would be subject to a range of
regulatory approvals and consents. If an agreement was reached, the company
would announce the details in accordance with its statutory disclosure
obligations. Shareholders were advised to continue to exercise caution when
dealing in the company"s securities until full announcements had been made.
BOARD CHANGES
Dr Paseka Ncholo has been appointed as Executive Chairman of the new vehicle,
DRDGOLD SA, formed as a result of the merger between DRDGOLD and KBH"s South
African gold mining interests. In order to provide this new entity with his full
time attention and leadership, and, in consideration of conflicts of interest,
Dr Ncholo will resign as a director of DRDGOLD.
Mr. Geoffrey Campbell, formerly Senior Independent Non-Executive Director will
take over as Non-Executive Chairman of DRDGOLD.
Professor Douglas Blackmur will assume the responsibility of Chairman of
DRDGOLD"s Nominations and Remunerations Committee, and became Senior Independent
Non-Executive Director.
After 9 years with the company, Mr. Ian Murray will be resigning as a Director
on completion of his existing contract on 30 November 2005.
Mark Wellesley-Wood, Chief Executive Officer ("CEO"), will be spending a greater
portion of his time at Emperor and attending to DRDGOLD"s Australasian
interests.
Australasian operations
Porgera (20% of the Quarter Quarter % Quarter
Joint Venture) Sep 2005 Jun 2005 Change Sep 2004
Ore milled t"000 281 297 (5) 288
Yield g/t 4.80 4.65 3 5.20
Gold produced oz 43 395 44 409 (2) 48 162
kg 1 350 1 382 (2) 1 498
Capital expenditure
US$ m 2.0 8.3 77 2.7
ZAR m 12.9 52.3 75 17.3
Cash operating costs
US$/oz 264 227 (16) 174
ZAR/kg 55 383 46 706 (19) 35 767
While yield was 3% higher at 4.80 gram per tonne ("g/t"), ore milled was 5%
lower at 281 000 tonne ("t"), resulting in a 2% decline in attributable gold
production to 43 395 oz.
Key amongst the factors impacting negatively on production were a seven-day
power cut due to powerline vandalism, mill feed dilution, pumping restrictions
in the ball mill circuit and a general re-allocation of resources for the
removal of slip material from the previously-reported West Wall failure.
Cash operating unit costs increased by 16% to US$264 per ounce due to higher
fuel, chemical costs and lower gold production.
Tolukuma Quarter Quarter % Quarter
Sep 2005 Jun 2005 Change Sep 2004
Ore milled t"000 47 52 (10) 52
Yield g/t 9.40 11.21 (16) 11.65
Gold produced oz 14 199 18 769 (24) 19 484
kg 442 583 (24) 606
Capital expenditure
US$ m 1.1 0.5 (120) 1.1
ZAR m 7.3 3.5 (109) 6.9
Cash operating costs
US$/oz 441 413 (7) 321
ZAR/kg 92 466 84 918 (9) 65 908
Gold production was 24% lower at 14 199 oz, reflecting a 10% decrease in ore
milled to 47 000 t and a 16% decline in yield to 9.40 g/t.
Production was affected both by a lack of available stoping areas, leading to
the mining of more underground stockpiled material and by bad weather. The
latter resulted in 19 `no-fly" days, during which stocks - primarily diesel for
power generation and reagents for the milling process - could not be airlifted
to the mine. Consequently, 11 days" production - the equivalent of some 2 300 oz
- were lost.
As a result of lower production, cash operating unit costs were 7% higher at
US$441 per ounce. Significant savings were made in mobile maintenance and
underground mining during the quarter under review however, helping to offset
higher fuel prices and consumption arising from reduced water for hydro power
generation.
Emperor Quarter Quarter % Quarter
(45.33% attributable) Sep 2005 Jun 2005 Change Sep 2004
Ore milled t"000 54 45 20 38
Yield g/t 5.94 6.53 (9) 7.97
Gold produced oz 10 326 9 484 9 9 741
kg 321 294 9 303
Attributable gold production increased by 9% to 10 326 oz, due to a 20% increase
in ore milled to 54 000 t and a 9% decrease in yield to 5.94 g/t.
Development to open up reserves and increase mineable face length was 49% higher
at 3 802 meters ("m").
These increases reflect the successful deployment under the new DRDGOLD-led
management team of the so-called Me Caka (Do It) Process, a key feature of which
has been a switch from a 6/2 (six days on, two days off) roster to a 5/2 (five
days on, two days off) roster to improve worker morale and productivity.
Indicative of improved worker morale has been a significant reduction in shifts
lost due to absenteeism, from an average of 2 000 a month to 600.
Cash unit costs declined by 5% while this was due in part to the increase in
gold production, various savings were achieved from the work roster change - in
compressed air and water consumption, for example. In addition, there was less
pressure on heavy vehicles, resulting in better maintenance, fewer breakdowns
and lower spares costs. The impact of a higher fuel price was partially offset
by a 3% saving in fuel consumed for power generation. Efforts to effect further
savings continue.
The Philip Shaft winder motor generator set and motor field coils have been
replaced and the winder is performing satisfactorily.
South African operations
Blyvoor Quarter Quarter % Quarter
Sep 2005 Jun 2005 Change Sep 2004
Area mined m2 000 35 42 (17) 48
Development m 729 423 72 720
Face length m 1 228 1 187 3 1 755
Stoping width cm 109 110 (1) 109
Ore milled
Underground t"000 173 138 25 180
Surface t"000 873 807 8 577
Total t"000 1 046 945 11 757
Yield
Underground g/t 6.23 7.83 (21) 6.74
Surface g/t 0.33 0.25 30 0.21
Total g/t 1.30 1.36 (4) 1.76
Gold produced
Underground oz 34 626 34 755 - 39 031
kg 1 077 1 081 - 1 214
Surface oz 9 196 6 559 40 3 858
kg 286 204 40 120
Total oz 43 822 41 314 6 42 889
kg 1 363 1 285 6 1 334
Capital expenditure
US$ m 0.8 - (1) 0.2
ZAR m 5.5 0.2 (2 650) 1.5
Cash operating costs
US$/oz 419 393 (7) 538
ZAR/kg 87 806 81 545 (8) 110 409
Total gold production rose 6% to 43 822 oz, reflecting a 40% increase in surface
production to 9 196 oz due both to increased throughput from the slimes dam
project and the milling of waste rock, the latter at an average grade of 1 g/t.
Underground production was slightly lower at 34 626 oz, reflecting a 17% decline
in area mined to 35 000 square metres ("m?") and a 21% decrease in yield to 6.23
g/t. The main contributor was the loss of high grade panels due to seismic
activity during July that necessitated the temporary redeployment of six crews
to lower grade areas. Increased sweeping and vamping helped to offset the
negative impact. The affected high grade panels have been re-established and
production from these will resume in the course of the current (December)
quarter.
Mine call factor ("MCF") showed improvement, largely due to the successful
implementation of single cartridge blasting that results in bigger rock
fragmentation and consequently, less gold loss.
Productivity, in terms of grams per total employee costed ("g/tec") increased by
5% to 130.41, reflecting the benefits of continuing training for in-stope
personnel and a further reduction in the average temperature at working faces to
29.5?C.
Development increased by 72% to 729 m, reflecting better ore pass management and
the introduction of an incentive scheme for development crews. Opening up
increased by 36% to 1 466 m.
Overall cash operating unit costs were 7% higher at US$419 per ounce. Key
contributors were the cost of filling two sinkholes that occurred within the
mine"s lease area during the quarter; the impact of Eskom"s higher winter
tariffs on power costs; and the effect of back-dating the 2005 wage increase to
1 July 2005. Wage negotiations progressed very satisfactorily and settlement -
6% in the current financial year and 6.5% in the 2006 financial year - was
reached without recourse to industrial action.
The opening up of Carbon Leader panels on 15 level of the No 5 Sub-Shaft Project
(previously known as the No 2 Sub-Shaft Project) is behind schedule due both to
a delayed start and to geological features that have been encountered. In terms
of a revised plan, mining has been switched to easier-to-access, higher grade
areas at No 4 Shaft. In addition, less faulted, higher grade areas on 15 level
of the project will be prioritised. Work on accessing No 5 Sub-Shaft from No 5
Shaft on 15 level is slightly ahead of schedule.
The slimes dam expansion project was commissioned during September 2005 as
anticipated and production is building smoothly to the planned 300 000 t per
month. The plant upgrade has been completed and efficiencies have improved, as
expected.
DRDGOLD"s training centre for its South African operations has been successfully
relocated from the liquidated and subsequently sold North West Operations
("NWO") at Stilfontein to Blyvoor. Provisional International Safety Organisation
accreditation for adult basic education and training and for mining and
metallurgical training has been secured. Engineering training will continue to
be outsourced, as before the NWO liquidation.
Crown Quarter Quarter % Quarter
(40% attributable) Sep 2005 Jun 2005 Change Sep 2004
Ore milled t"000 894 904 (1) 913
Yield g/t 0.43 0.37 16 0.42
Gold produced oz 12 288 10 886 13 12 282
kg 382 339 13 382
Cash operating costs
US$/oz 373 397 6 361
ZAR/kg 78 248 81 879 4 74 116
Attributable gold production was 13% higher at 12 288 oz, a 16% increase in
yield to 0.43 g/t, more than compensating for a 1% decline in tonnage treated to
894 000 t.
The improvement in yield resulted both from the successful commissioning of the
CMR(2/A/1) reclamation site and a general improvement in extraction rates at
Crown"s three plants.
Cash operating unit costs were 6% lower at US$373 per ounce, reflecting high
gold production.
Wage negotiations are currently under way.
ERPM Quarter Quarter % Quarter
(40% attributable) Sep 2005 Jun 2005 Change Sep 2004
Area mined m2 # 000 18 18 - 25
Development # m 336 513 (35) 74
Face length # m 698 715 (2) 770
Stoping width # cm 133 127 5 128
Ore milled
Underground t"000 34 33 3 47
Surface t"000 206 193 7 152
Total t"000 240 226 6 199
Yield
Underground g/t 7.88 9.18 (14) 6.70
Surface g/t 0.43 0.44 (2) 0.26
Total g/t 1.50 1.72 (13) 1.78
Gold produced
Underground oz 8 719 9 800 (10) 10 127
kg 271 305 (10) 315
Surface oz 2 881 2 752 6 1 287
kg 90 85 6 40
Total oz 11 600 12 552 (7) 11 414
kg 361 390 (7) 355
Cash operating costs
US$/oz 412 370 (11) 401
ZAR/KG 86 319 76 395 (13) 82 072
# Represents total mine.
Total attributable gold production was 7% lower at 11 600 oz, reflecting a 10%
decline in attributable underground gold production to 8 719 oz. Attributable
surface production, however, was 6% higher at 2 881 oz.
Lower underground production resulted from the combined effects of traversing
geological discontinuities encountered and lower development. The former slowed
the pace of mining, increased stoping width and thus, the volume of waste mined.
As a result, yield was 14% lower at 7.88 g/t. Production in the current
(December) quarter is expected to be affected somewhat, due to the need to re-
develop working areas.
A 35% decline in development to 336 m arose from a re-organisation of labour.
Development, however, is now back on track. While a shortage of available face
meant that area mined during the quarter was unchanged at 18 000 m?, this
situation is expected to improve in the current (December) quarter due to
increased development making more face available for mining.
Opening up and development on and above 70 level has begun. In future, this will
reduce pressures on the availability of the decline shaft.
The increase in surface production reflects improved milling capacity of Cason
Dump material at the ERPM plant, following the completion of repairs. Milling of
material from Cason is expected to improve further with the installation of two
additional mills at the Knights plant, scheduled for completion in March 2006.
Overall cash operating unit costs increased by 11%, reflecting the cost of
additional timber support required to traverse the underground faulting
referred to above; the cost of an additional pump required for the pumping
upgrade programme (see below); and payment of an installment for the plugging
project, pending the availability of funds from the Department of Minerals and
Energy ("DME").
Phase 1 on the plugging project has been completed and Phase 2 is now 40%
completed. The third and final phase is scheduled to begin in August 2006. The
pumping upgrade programme is on schedule and has been re-scoped to include mud-
handling facilities. These will cost an additional R7 million but payback from
additional gold recovery is expected in a 12-month timeframe.
The Far East Vertical Shaft decline shaft rehabilitation programme continues on
schedule and is expected to substantially reduce downtime-related risk.
Environmental rehabilitation also continues apace. At the end of the quarter
under review, the Hercules Shaft was demolished and rehabilitation of the shaft
area is under way, in accordance with the requirements of the DME-approved
rehabilitation programme. A programme to recover gold from disused railway line
ballast is proving lucrative, and slimes dam revegetation is expected to be
restored to previous levels with the replacement of stolen and vandalized
equipment.
Wage negotiations are currently under way.
Discontinued operations
North West Quarter Quarter % Quarter
(Hartebeestfontein Sep 2005 Jun 2005 Change Sep 2004
and Buffelsfontein mines)
Area mined m2 000 - - - 92
Development m - - - 8 340
Face length m - - - 3 003
Stoping width cm - - - 120
Ore milled
Underground t"000 - - - 396
Surface t"000 - - - 170
Total t"000 - 566
Yield
Underground g/t - - - 5.54
Surface g/t - - - 1.09
Total g/t - - - 4.21
Gold produced
Underground oz - - - 70 572
kg - - - 2 195
Surface oz - - - 5 980
kg - - - 186
Total oz - - - 76 552
kg - - - 2 381
Capital expenditure
US$ m - - - 2.1
ZAR m - - - 13.1
Cash operating costs
US$/oz - - - 459
ZAR/kg - - - 94 116
Subsequent to the end of the quarter under review, a scheme of arrangement for
the acquisition of Buffelsfontein Gold Mines Limited ("Buffelsfontein") proposed
by Simmer & Jack (Pty) Limited and accepted by a majority of Buffelsfontein"s
creditors, including DRDGOLD, was approved and sanctioned by the High Court of
South Africa.
CASH OPERATING COSTS
Reconciliation of Non-Gaap financial measures
For the three months ended 30 September 2005
Blyvoor Tolukuma Porgera Continued
Operations
Cash operating
costs US$000 18 341 6 263 11 458 36 062
Adjusted for:
Revenue from
byproducts US$000 (33) (228) (47) (308)
Other non-operating
cash costs US$000 145 248 265 658
Production costs US$000 18 453 6 283 11 676 36 412
Cash operating
costs US$/oz 419 441 264 356
Discontinued Group
Operations
Cash operating
costs US$000 - 36 062
Adjusted for:
Revenue from
byproducts US$000 - (308)
Other non-operating
cash costs US$000 480 1 138
Production costs US$000 480 36 892
Cash operating
costs US$/oz - 356
For the three months ended 30 June 2005 (Restated)
Blyvoor Tolukuma Porgera Continued
Operations
Cash operating
costs US$000 16 225 7 755 10 089 34 069
Adjusted for:
Revenue from
byproducts US$000 (96) (295) 2 548 2 157
Other non-operating
cash costs US$000 73 573 (618) 28
Production costs US$000 16 202 8 033 12 019 36 254
Cash operating
costs US$/oz 393 413 227 326
Discontinued Group
Operations
Cash operating
costs US$000 - 34 069
Adjusted for:
Revenue from
byproducts US$000 - 2 157
Other non-operating
cash costs US$000 810 838
Production costs US$000 810 37 064
Cash operating
costs US$/oz - 326
For the three months ended 30 September 2005
Blyvoor Tolukuma Porgera Continued
Operations
Cash operating
costs ZAR000 119 679 40 870 74 767 235 316
Adjusted for:
Revenue from
by products ZAR000 (216) (1 487) (304) (2 007)
Other non-operating
cash costs ZAR000 945 1 617 1 727 4 289
Production costs ZAR000 120 408 41 000 76 190 237 598
Cash operating
costs ZAR/kg 87 806 92 466 55 383 74 585
Discontinued Group
Operations
Cash operating
costs ZAR000 - 235 316
Adjusted for:
Revenue from
byproducts ZAR000 - (2 007)
Other non-operating
cash costs 3 130 7 419
Production costs ZAR000 3 130 240 728
Cash operating
costs ZAR/kg - 74 585
For the three months ended 30 June 2005 (Restated)
Blyvoor Tolukuma Porgera Continued
Operations
Cash operating
costs ZAR000 104 785 49 507 64 548 218 840
Adjusted for:
Revenue from
byproducts ZAR000 (595) (1 891) 15 665 13 179
Other non-operating
cash costs ZAR000 485 3 694 (3 693) 486
Production costs ZAR000 104 675 51 310 76 520 232 505
Cash operating
costs ZAR/kg 81 545 84 918 46 706 67 335
Discontinued Group
Operations
Cash operating
costs ZAR000 - 218 840
Adjusted for:
Revenue from
byproducts ZAR000 - 13 179
Other non-operating
cash costs ZAR000 5 180 5 666
Production costs ZAR000 5 180 237 685
Cash operating
costs ZAR/kg - 67 335
EXPLORATION - TOLUKUMA
Work for the quarter focused on tenure management. A work program was completed
for EL 1352 and wardens hearings were conducted for ELs 894, 580 and 683.
Renewals were granted for EL 1264 and 1297. Seven ELs are current with four ELs
580, 683, 894 and 1327 at renewal application stage awaiting Mining Advisory
Board ("MAB") approval. Discrepancies in EL 683 reporting have been rectified
and resubmitted to MAB, as requested.
Consultants commenced a major review in late August of all the projects,
prospects and targets across all EL"s with a focus initially on the Central
Tenements surrounding Tolukuma Mine and EL 104. The review is comprehensively
sourcing and re-evaluating all past exploration data. The review aided by
recently acquired aeromagnetics (1998 & 2003) and PNG Mines Department Open File
data compilations will provide a new synthesis of the exploration
prospectiveness. A re-ranking of projects and prospects towards prioritising
future exploration work programs is due for completion by the end of the
calendar year.
Arrangements commenced to relocate the Regional Exploration data and activities
from Tolukuma Mine to Tolukuma"s Port Moresby office.
ML 104 EXPLORATION
120/Zine North Extension
No additional holes were drilled during the quarter. Drilling results received
during the quarter:
Hole No From depth(m) To depth(m) True width(m) AU g/t AG g/t
120/ZN_010 174.3 174.9 0.6 0.02 2.6
Sawmill Vein
Drilling on the Sawmill Vein was completed in July 2005. During the quarter two
holes (SM014 and SM015) were drilled for a total of 167.2 m. A total of fifteen
holes have been drilled on this structure.
Hole No From depth(m) To depth(m) True width(m) AU g/t Ag g/t
SM014 143.5 143.7 0.2 0.4 2.0
SM015 151.3 151.7 1.2 0.2 2.0
Underground LMA90 drilling
During the quarter five holes were completed. All the holes intersected the
target structures. Although the structures are promising particularly the
southern extension of the Degot/Fundoot, the results were much lower than
expected.
Hole No From depth(m) To depth(m) True width(m) AU g/t Ag g/t
TU056 189.4 191.4 0.8 3.5 38.5
TU057 175.4 176.2 0.6 1.0 23.0
TU058 196.2 197.5 0.9 0.5 6.0
TU059 156.0 156.6 0.5 0.2 28.0
TU060 81.7 82.4 0.7 0.4 50.0
Gulbadi `Y" Vein
A total of 5 holes were drilled on this structure. The best results were 0.13m
at 13.1 g/t of gold. Other results are summarized below:
Hole No From depth(m) To depth(m) True width(m) AU g/t Ag g/t
GBY001 91.9 92.7 0.7 3.7 155.0
GBY003 122.6 122.9 0.3 2.6 35.0
GBY003 158.2 158.5 0.2 0.5 14.0
GBY004 135.8 136.9 0.4 2.2 17.0
GBY005 82.0 82.2 0.1 13.1 48.0
Gufinis (Tolukuma North) Drilling
Two holes were drilled of which the first hole intersected a mineralised zone
which resulted in 6.0 m at 11.6 g/t of gold including 3.4 m at 17.1 g/t of gold
(97% core recovery). The second hole intersected the same structure around 70 m
below the above intersection. This gave 4.7 m at 2.0 g/t of gold including 0.3 m
at 11.6 g/t of gold.
MARK WELLESLEY-WOOD GEOFFREY CAMPBELL
Chief Executive Officer Non-Executive Chairman
27 October 2005
INVESTOR INFORMATION
DIRECTORS - (*British)(**Australian)(***American)
Executives:
MM Wellesley-Wood (Chief Executive Officer)*
JWS Sayers (Chief Financial Officer)
IL Murray (Corporate Development Officer)
Non-executives:
MP Ncholo
J Turk ***
Independent non-executives:
DJM Blackmur**
GC Campbell* (Non-Executive Chairman)
RP Hume
Group Company Secretary:
TJ Gwebu
INVESTOR RELATIONS
For further information, contact Ilja Graulich at:
Tel: (+27-11) 219-8700, Fax: (+27-11) 476-2637,
e-mail: ilja.graulich@za.drdgold.com,
website: http://www.drdgold.com
Ebsco House 4,
299 Pendoring Avenue,
Blackheath,
Randburg,
South Africa.
PO Box 390,
Maraisburg, 1700,
South Africa.
Date: 27/10/2005 08:00:20 AM Produced by the JSE SENS Department
