| Thu 24 Aug 2006, 8:00 | | DrdGold - Report On Activities For The Fourth Quar |
|
DRD
DRDD
DrdGold - Report On Activities For The Fourth Quarter Ended 30 June 2006
DRDGOLD 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
("DRDGOLD" or "the company")
REPORT ON ACTIVITIES FOR THE FOURTH QUARTER ENDED 30 JUNE 2006
GROUP RESULTS
KEY FEATURES
-Total attributable gold production for the quarter steady at 131 857oz
-4% improvement from SA operations for the quarter; 25% for the year
-Porgera production for the quarter up 11%; West Wall remediation
now 60% complete
-35% increase in attributable reserves to 8.8m ounces
-New boards for Emperor and DRDGOLD SA
-Emperor transaction closed
-DRDGOLD holds 78.9% of `new" Emperor
-Group costs down to $452/oz (R93627/kg)
KEY RESULTS SUMMARY
GROUP Quarter Quarter %
30 Jun 2006 31 Mar 2006 Change
Attributable gold production(*)
Australasian operations oz 41 676 42 979 (3)
kg 1 296 1 337 (3)
South African operations oz 90 181 86 678 4
kg 2 805 2 696 4
Group oz 131 857 129 657 2
kg 4 101 4 033 2
Cash operating costs
Australasian operations US$/oz 329 514 36
ZAR/kg 68 758 102 217 33
South African operations US$/oz 507 511 1
ZAR/kg 105 117 103 519 (2)
Group US$/oz 452 512 12
ZAR/kg 93 627 103 136 9
Capital expenditure
Net Group US$ m 13.7 5.4 (154)
ZAR m 87.9 32.8 (168)
12 months to 12 months to
30 Jun 2006 30 Jun 2005
Attributable gold production(*)
Australasian operations oz 211 425 317 134
kg 6 578 9 864
South African operations oz 315 976 251 902
kg 9 828 7 835
Discontinued operations oz - 199 850
kg - 6 216
Group oz 527 401 768 886
kg 16 406 23 915
Cash operating costs
Australasian operations US$/oz 362 231
ZAR/kg 74 775 46 289
South African operations US$/oz 480 439
ZAR/kg 99 301 87 895
Discontinued operations US$/oz - 508
ZAR/kg - 101 701
Group US$/oz 433 372
ZAR/kg 89 475 74 404
Capital expenditure
Net Group US$ m 36.6 24.9
ZAR m 235.1 154.8
*Attributable - Emperor Mines Limited ("Emperor) consolidated 100% from 6
April 2006 (previously 39.52% attributable) and Crown Gold Recoveries (Pty)
Limited ("CGR") consolidated 100% from 1 December 2005 (previously 40%
attributable)
STOCK
ISSUED CAPITAL
320 035 078 ordinary no par value shares
5 000 000 cumulative preference shares
Total ordinary no par value shares issued and committed: 352 210 334
STOCK TRADED JSE NASDAQ FRANKFURT
Avg. volume for the 3 months
per day (000) 471 4 900 91
% of issued stock traded
(annualised) 38% 400% 7%
Price - High R11.70 US$1.98 Euro 1.47
- Low R7.71 US$1.11 Euro 0.92
- Close R10.00 US$1.37 Euro 1.09
SAFETY
I am sad to report that two employees died in mine-related accidents, both
at ERPM, in the quarter ended 30 June 2006. Phalali Silase, a team leader,
died in a seismically related rockfall on 4 April and Matjoesa Samuel, a
stope team member, in a similar incident on 27 June. Seven fatalities for
the year as a whole compares with 10 in the previous year. Two of the seven
occurred at Emperor"s Vatukoula operation in Fiji, while the balance was in
the South African operations of DRDGOLD. In the previous year, all 10
fatalities occurred in the operations of DRDGOLD in South Africa.
While the Fatality Frequency Rate for the year within DRDGOLD South African
Operations (Pty) Limited ("DRDGOLD SA") showed a slight improvement from
0.25 per million man hours to 0.22, the Lost Time Injury Frequency Rate
("LTIFR") deteriorated from 9.55 to 10.81 and the Reportable Injury
Frequency Rate from 3.44 to 3.81. While this is not an acceptable
performance by the company as a whole for the year, Blyvooruitzicht Gold
Mining Company Limited ("Blyvoor"), which showed commendable improvements in
respect of all three measures, won the West Rand Mine Managers" Safety
Competition for the eighth year in succession, and achieved one million
fatality-free shifts shortly before year end.
Within Emperor"s managed operations, Vatukoula"s LTIFR for the year
deteriorated from 1.6 to 2.2 and its Disabling Injury Frequency Rate
("DIFR") from 5.6 to 7.8 while at Tolukuma Gold Mines Limited ("Tolukuma")
both the LTIFR and DIFR worsened from 2.1 to 2.6.
Needless to say, a range of initiatives is in place at both the South
African and Australasian operations to effect the necessary improvements.
Particularly noteworthy is a broad-spectrum safety awareness campaign dubbed
`Before You Work" currently being implemented at both ERPM and Blyvoor, and
the Accelerated Development and Training Plan ("ACDTP") at Vatukoula. As its
title implies, the ACDTP has a major focus on training and this includes
safety matters.
PRODUCTION
Total attributable gold production for the quarter was 2% higher at 131 857
ounces ("oz"), reflecting a 4% increase from the South African operations to
90 181oz. Australasian gold production was 3% lower at 41 676oz.
Ongoing west wall remediation work at Porgera, the negative impacts of
underground flooding and bad weather at Tolukuma and a planned shutdown at
Vatukoula to implement ACDTP were all contributors to lower Australasian
production.
In South Africa, the upswing in production can be attributed to a generally
steady-state performance from Crown and indeed from the surface recovery
operations as a whole, to better production at ERPM notwithstanding faulting
encountered and increased seismicity experienced towards the end of the June
quarter and to the start of Blyvoor"s implementation of its new, volume-
driven plan.
For the year, total attributable gold production was 31% lower at 527 401oz
than in the previous year, reflecting the impact of a 33% decline in
Australasian gold production to 211 425oz. South African gold production
rose by 25% to 315 976oz.
CASH OPERATING COSTS
Group cash operating costs for the quarter decreased by 12% to US$452/oz.
For the year, group cash operating costs were 16% higher at US$433/oz than
in the previous year. The driver was Australasian cash operating costs,
which were 57% higher at US$362/oz. South African cash operating costs rose
by 9% to US$480/oz.
CORPORATE DEVELOPMENTS
In April 2006 the vending of DRDGOLD"s Australasian operations into Emperor
was concluded and Emperor now ranks as the fourth largest gold producer
listed on the Australian Stock Exchange. Consequences of the transaction for
DRDGOLD were an increased stake in Emperor (now 78.9%) and US$30 million in
cash.
The Emperor transaction, with another earlier in the year that fully
incorporated Blyvoor, Crown and ERPM into a new entity, DRDGOLD SA - 85%
owned by DRDGOLD and 15% by a wholly owned subsidiary of its black economic
empowerment partner, Khumo Bathong Holdings Limited ("KBH") - concluded a
thorough and meticulous re-positioning of DRDGOLD"s gold mining assets.
These are now housed in two, distinct regional entities - one Pacific Rim-
focused and the other South Africa- and Africa-focused. An enormously
important consequence is that there will be no cross-subsidisation of one by
the other going forward, a factor that, in the past, caused value-
destruction and consequently, enormous and understandable shareholder
irritation.
DRDGOLD was removed from the official list of the Australia Stock Exchange
Limited as from the close of trading on Friday, 28 July 2006, pursuant to
the de-listing arrangement described in the letter to shareholders dated 21
April 2006 and the attachments to that letter and in accordance with listing
rule 17.11
APPOINTMENTS
Injections of fresh board and senior management capacity are vital to the
future success of both Emperor and DRDGOLD SA, and it is very pleasing to
report that huge progress in this respect was made during the quarter and
into the start of the new financial year.
At Emperor, Brad Gordon - former Managing Director of Placer Dome Nuigini
Limited and General Manager of Porgera - joined as Chief Executive Officer
and an executive director. Clyde Moore was appointed as Chief Financial
Officer and executive director. Geoffrey Campbell, Chairman of DRDGOLD, and
Ilja Graulich, Strategic Development Officer for DRDGOLD, both joined the
board as non-executive directors. Geoffrey was also appointed as Chairman.
Bob McDonald was also appointed an independent non-executive director.
Frazer Bourchier - former Manager: Mining at Porgera - was appointed General
Manager at Vatukoula and John Wallace - former HR Manager at Porgera -
joined as General Manager: Human Resources based at Emperor"s corporate
office in Brisbane. Brad Sampson was appointed General Manager: Tolukuma.
At DRDGOLD SA, Niel Pretorius - acting Chief Executive Officer and DRDGOLD"s
Group Legal Counsel - was confirmed as Chief Executive Officer in place of
Dr Paseka Ncholo, who stood down in January due to other business
commitments. Craig Barnes, former DRDGOLD Group Financial Accountant, was
appointed Chief Financial Officer and an executive director. Thulo Mogotsi,
an executive director of KBH, and Louisa Zondo, General Counsel for South
African Airways, joined as non-executive directors. Ben Nyirenda, Head of
New Business for DRDGOLD, was appointed as an alternate director. At
Blyvoor, Collie Russouw - former Mine Manager at Harmony"s Virginia
operations - takes over as General Manager in place of Mark Munroe who will
head up a new entity, DRDGOLD Capital, focusing on the company"s growth in
Africa.
LOOKING AHEAD
A year of extremely hard work has produced a way forward for DRDGOLD and its
key investments, Emperor and DRDGOLD SA, that will be enormously challenging
but, at the same time, encouraging. I say encouraging, because the way
forward is clear and filled with new brown- and greenfields growth
opportunities, and because our perennial confidence in our product, gold, is
being rewarded with renewed and seemingly sustained price buoyancy.
In South Africa, Blyvoor is proceeding with its new plan that is expected to
deliver fewer but more profitable ounces, and a new approach provides
impetus to its No 2 Sub-shaft project. At ERPM, seismicity remains a
challenge but risk will be all the better managed through more mining of
less active, though lower grade, areas above 70 level. ERPM"s great promise,
of course, lies in the extension of high-grade mining into the adjacent
Sallies lease area, for which exploration is already under way. For Crown,
much in the medium term depends on a successful outcome to its application
to mine the Top Star dump in central Johannesburg. Thanks to the current
gold price, we are able, also, to look afresh at the Argonaut Project to the
south of Johannesburg, albeit on a smaller scale.
In Australasia, management of the Porgera Joint Venture is in the capable
hands of the new majority shareholder, Barrick, and there is every reason to
be confident that turnaround forecasts will be met. At Tolukuma, a range of
infrastructural improvements, coupled with mining of recently discovered
bonanza Zine deposits, should lead to significant operating and financial
improvements. At Vatukoula, long the `problem child", a shift in focus to
high-grade mining, long overdue infrastructural improvements and employee re-
training mean there is at last the very real prospect of profitable mining
into the future.
Lastly, indicative of DRDGOLD"s longer term prospects, is the healthy
increase in the company"s attributable reserve and resource position. The
former has increased by 35% to 8.8 million ounces and the latter by 30% to
47.6 million ounces.
We like to say `we do what we say". At various times in the recent past,
however, not everyone liked hearing about our intentions, not least because
they often meant `pain and discomfort" of some sort. Looking down the track,
I believe all of our stakeholders should feel more enthused, both about our
ambitions and our ability to deliver.
KEY OPERATING AND FINANCIAL RESULTS
Australasian operations
Porgera Quarter Quarter %
(20% of the Joint Venture) 30 Jun 2006 31 Mar 2006 Change
Ore milled t"000 305 241 27
Yield g/t 2.77 3.15 (12)
Gold produced oz 27 215 24 410 11
kg 846 760 11
Cash operating costs US$/oz 123 455 73
ZAR/kg 25 811 90 355 71
ZAR/tonne 72 285 75
Capital expenditure US$ m 4.7 1.1 (327)
ZAR m 30.0 5.8 (417)
12 months to 12 months to
30 Jun 2006 30 Jun 2005
Ore milled t"000 1 097 1 200
Yield g/t 3.64 5.07
Gold produced oz 128 238 195 394
kg 3 990 6 079
Cash operating costs US$/oz 277 186
ZAR/kg 57 148 37 291
ZAR/tonne 208 189
Capital expenditure US$ m 14.5 16.1
ZAR m 93.1 100.2
Attributable gold production for the quarter ended 30 June 2006 was 11%
higher at 27 215oz, reflecting a 27% increase in ore milled to 305 000 tonne
("t"). Average yield was 12% lower at 2.77 grams per ton ("g/t"). Low grade,
long term stockpiles continued to provide the primary ore feed at Porgera
during the quarter. Cash operating costs were 73% lower at US$123/oz,
reflecting higher gold production and an adjustment to deferred stripping
cost capitalised during the quarter.
Remediation of the west wall cutback continues and is now 60% complete. The
JV expects mining of ore from the open pit to begin later in 2006, after
which both production levels and cash costs are expected to improve.
Tolukuma Quarter Quarter %
30 Jun 2006 31 Mar 2006 Change
Ore milled t"000 45 47 (4)
Yield g/t 8.58 7.70 11
Gold produced oz 12 408 11 659 6
kg 386 362 6
Cash operating costs US$/oz 781 637 (23)
ZAR/kg 161 858 127 122 (27)
ZAR/tonne 1 388 979 (42)
Capital expenditure US$ m 0.8 - -
ZAR m 5.1 (0.4) (1 375)
12 months to 12 months to
30 Jun 2006 30 Jun 2005
Ore milled t"000 193 211
Yield g/t 8.83 11.24
Gold produced oz 54 790 76 314
kg 1 704 2 372
Cash operating costs US$/oz 561 346
ZAR/kg 116 042 69 348
ZAR/tonne 1 025 780
Capital expenditure US$ m 4.4 3.4
ZAR m 28.4 21.3
Gold production for the quarter was 6% lower at 12 408oz. While the average
yield improved by 11% to 8.58g/t, ore milled was 4% lower at 45 000t.
Poor weather prevented continuous freight movement to the mine site by
helicopter, resulting in several plant shutdowns during the quarter. To
overcome this in the future, strategic stocks of consumables at the mine
site will be increased.
Improved flexibility is expected as initial production areas along the newly
discovered Zine structure are developed and brought into the mine plan.
Lower gold production was the main contributor to a 23% increase in cash
operating costs to US$781/oz.
Vatukoula ("Old" Emperor)
100% consolidated from 6 April 2006(Previously 39.52% attributable)
Quarter Quarter %
30 Jun 2006 31 Mar 2006 Change
Ore milled t"000 23 36 (36)
Yield g/t 2.78 5.97 (53)
Gold produced oz 2 053 6 910 (70)
kg 64 215 (70)
Cash operating costs# US$/oz 333 690 52
ZAR/kg 74 953 137 002 45
ZAR/tonne 209 809 74
Capital expenditure (net)#
US$ m 3.5 1.6 (119)
ZAR m 22.2 9.9 (124)
12 months to 12 months to
30 Jun 2006 30 Jun 2005
Ore milled t"000 161 213
Yield g/t 5.49 6.63
Gold produced oz 28 397 45 426
kg 884 1 413
Cash operating costs# US$/oz 588 434
ZAR/kg 121 515 86 527
ZAR/tonne 697 584
Capital expenditure (net)#
US$ m 9.5 8.4
ZAR m 60.8 52.0
# Represents total operation
Implementation of the mine"s new ACDTP involved a temporary shutdown of the
mine on 20 April and a gradual start-up early in June. Consequently, gold
production for the quarter was only 2 053oz compared with 17 485oz in the
previous quarter (DRDGOLD attributable portion 6 910oz). Ore milled was 75%
lower at 23 000t and average yield 53% lower at 2.78g/t. The ACDTP has been
designed to introduce flexibility to production areas, improve
infrastructure and increase the productivity of the workforce. The plan
includes development of higher grade areas at Philip Shaft and upgrading of
associated shaft infrastructure. In addition, the entire workforce will
undergo comprehensive assessment, re-skilling and retraining. During the
quarter, work continued on various infrastructure-related improvements at
Philip Shaft. Production from Smith Shaft has now stopped.
South African operations
Blyvoor Quarter Quarter %
30 Jun 2006 31 Mar 2006 Change
Ore milled
Underground t"000 178 171 4
Surface t"000 920 927 (1)
Total t"000 1 098 1 098 -
Yield
Underground g/t 5.26 4.59 15
Surface g/t 0.33 0.38 (13)
Total g/t 1.13 1.03 10
Gold produced
Underground oz 30 124 25 238 19
kg 937 785 19
Surface oz 9 806 11 221 (13)
kg 305 349 (13)
Total oz 39 930 36 459 10
kg 1 242 1 134 10
Cash operating costs
Underground US$/oz 607 692 12
ZAR/kg 126 037 138 084 9
ZAR/tonne 663 634 (5)
Surface US$/oz 276 233 (18)
ZAR/kg 57 289 46 553 (23)
ZAR/tonne 19 18 (6)
Total US$/oz 526 551 5
ZAR/kg 109 155 109 914 1
ZAR/tonne 123 114 (8)
Capital expenditure US$ m 2.2 2.4 8
ZAR m 14.3 15.1 5
12 months to 12 months to
30 Jun 2006 30 Jun 2005
Ore milled
Underground t"000 674 587
Surface t"000 3 634 2 932
Total t"000 4 308 3 519
Yield
Underground g/t 5.55 7.31
Surface g/t 0.34 0.25
Total g/t 1.15 1.43
Gold produced
Underground oz 120 178 137 958
kg 3 738 4 291
Surface oz 39 515 23 920
kg 1 229 744
Total oz 159 693 161 878
kg 4 967 5 035
Cash operating costs
Underground US$/oz 551 468
ZAR/kg 113 789 93 715
ZAR/tonne 631 685
Surface US$/oz 248 272
ZAR/kg 51 245 54 331
ZAR/tonne 17 14
Total US$/oz 476 439
ZAR/kg 98 314 87 895
ZAR/tonne 113 126
Capital expenditure US$ m 8.8 2.1
ZAR m 56.8 12.9
The generally improved underground results reflect the start of
implementation of the new plan, key features of which are a reduction in
mining from the seismically active, high-grade No 5 Shaft area in the
interests of safety and an increase in production from the No 4 Shaft and
lower-grade No 6 Shaft areas.
A target of 70 000t per month from underground was expected by the end of
September 2006 but could be delayed by up to a month because of the required
overhaul of the No 6 Shaft winder and shaft repairs.
For the quarter ending June 2006, underground gold production was 19% higher
as a result of a 15% increase in average yield to 5.26g/t. Surface gold
production was 13% lower at 9 806oz, as a result of a 1% decrease in ore
milled to 920 000t and a 13% decrease in average yield to 0.33g/t. Lower
throughput reflects slower recovery of hard material from the slimes dam
project and downtime during the relocation of a pump station to access
higher grade slimes. Lower yield was mainly a factor of a foreseen decline
in the grade of rock dump material treated.
Total cash operating costs were 5% lower at US$526/oz, reflecting higher
underground gold production. Underground cash operating costs declined by
12% to US$607/oz, while surface cash operating costs rose by 18% to
US$276/oz.
A re-assessment of Phase 2 of the No 2 Sub-shaft project has indicated that
accessing the ore body between 27 and 35 level from No 6 Shaft will be
considerably more cost effective than from the No 2 Sub-shaft, as originally
envisaged. This approach is expected to lower the total capital cost of the
project from R100 million to R40 million. Work on Phase 2, according to the
new approach, began in July and is expected to be completed in two years.
Drilling to determine the extent of the Alpha Dyke in the No 5 Shaft high-
grade area, intercepted in the previous quarter some 40m further to the west
than anticipated, continued throughout the quarter under review. Indications
thus far are that the dyke is at least 30m thick.
Crown (100% attributable from 1 December 2005 (previously 40%)
Quarter Quarter %
30 Jun 2006 31 Mar 2006 Change
Ore milled t"000 2 070 1 946 6
Yield g/t 0.36 0.37 (2)
Gold produced oz 23 823 23 213 3
kg 741 722 3
Cash operating costs# US$/oz 489 502 3
ZAR/kg 101 456 99 841 (2)
ZAR/tonne 36 37 3
Capital expenditure
(net)# US$m 1.6 1.3 (23)
ZARm 10.6 7.8 (36)
12 months to 12 months to
30 Jun 2006 30 Jun 2005
Ore milled t"000 6 165 3 552
Yield g/t 0.38 0.40
Gold produced oz 75 959 45 424
kg 2 362 1 413
Cash operating costs# US$/oz 432 395
ZAR/kg 89 329 78 890
ZAR/tonne 35 31
Capital expenditure
(net)# US$m 4.9 1.5
ZARm 31.6 9.6
# Represents total operation
A 6% increase in ore milled to 2 070 000t for the quarter compensated for a
2% decline in average yield to 0.36g/t. Gold production rose by 3% to 23
823oz. Drier weather conditions contributed to the increase in throughput.
Cash operating costs were 3% lower at US$489/oz, reflecting higher gold
production.
A R3.2 million upgrade of the residue pipeline, scheduled for completion by
the end of August 2006, a R6.8 million upgrade of the CMR reclamation site
pipeline, scheduled for completion by the end of the September quarter, and
a R17.4 million refurbishment of the Knights plant mills are all expected to
improve efficiencies.
In respect of the planned recovery of material from the Top Star dump in
central Johannesburg, mining authorisation application procedures are under
way.
ERPM 100% attributable from 1 December 2005 (previously 40%)
Quarter Quarter %
30 Jun 2006 31 Mar 2006 Change
Ore milled
Underground t"000 77 72 7
Surface t"000 474 537 (12)
Total t"000 551 609 (10)
Yield
Underground g/t 8.17 8.86 (8)
Surface g/t 0.41 0.38 8
Total g/t 1.49 1.38 8
Gold produced
Underground oz 20 223 20 512 (1)
kg 629 638 (1)
Surface oz 6 205 6 494 (4)
kg 193 202 (4)
Total oz 26 428 27 006 (2)
kg 822 840 (2)
Cash operating costs#
Underground US$/oz 479 470 (2)
ZAR/kg 99 514 93 624 (6)
ZAR/tonne 813 830 2
Surface US$/oz 537 563 5
ZAR/kg 111 451 112 010 -
ZAR/tonne 45 42 (7)
Total US$/oz 493 493 -
ZAR/kg 102 316 98 045 (4)
ZAR/tonne 153 135 (13)
Capital expenditure
(net)# US$m 0.7 0.7 -
ZARm 4.8 4.4 (9)
12 months to 12 months to
30 Jun 2006 30 Jun 2005
Ore milled
Underground t"000 225 145
Surface t"000 1 598 752
Total t"000 1 823 897
Yield
Underground g/t 8.29 7.59
Surface g/t 0.40 0.38
Total g/t 1.37 1.55
Gold produced
Underground oz 59 999 35 392
kg 1 866 1 101
Surface oz 20 325 9 208
kg 633 286
Total oz 80 324 44 600
kg 2 499 1 387
Cash operating costs#
Underground US$/oz 461 381
ZAR/kg 95 293 76 303
ZAR/tonne 785 578
Surface US$/oz 499 527
ZAR/kg 103 109 105 288
ZAR/tonne 41 40
Total US$/oz 471 411
ZAR/kg 97 289 82 287
ZAR/tonne 134 127
Capital expenditure
(net)# US$m 2.1 (1.1)
ZARm 13.7 (7.5)
# Represents total operation
Total gold production for the quarter was 2% lower at 26 428oz, reflecting a
10% decrease in total ore milled to 551 000t. The overall average yield was
8% higher at 1.49g/t.
While underground ore milled was 7% higher at 77 000t, the average
underground yield was 8% lower at 8.17g/t, leading to slightly lower
underground gold production of 20 223oz. Lower grade reflects increased
mining from lower grade panels above 70 level. Underground production was
also adversely affected by the exclusion from the mine plan of stopes in the
73 West area due to seismicity.
Targeted available face above 70 level of 150m has now been achieved.
Traversing of the 16m, up-throw fault in the 70 East area is continuing.
Work to split the 70 level decline conveyor into two sections - thus
reducing wear and tear - is under way and is scheduled for completion by
December 2006.
The four-year, ERPM Extension (Sallies) exploration drilling programme has
begun, with the drilling of the first of three holes on 70 level in
progress. An application to the Department of Minerals and Energy for a
prospecting permit over an extension to the existing exploration area has
been accepted.
With respect to the pumping upgrade project, water pumping plans are
currently under review, while mud pumping feasibility work is continuing.
Phase 2 of the plugging project is on schedule and planning of Phase 3 has
been completed. The total plugging project is scheduled for completion by
June 2007.
Surface gold production was 4% lower at 6 205oz, reflecting a 12% decline in
surface ore milled to 474 000t. Average surface yield was 8% higher at
0.41g/t. Lower throughput was the result of mill breakdowns in the ERPM
plant. The commissioning of two additional mills at the Knights plant neared
completion at the end of the quarter, slightly behind schedule due to
various `teething" problems.
Discontinued operations
North West (Hartebeestfontein and Buffelsfontein mines)
12 months to 12 months to
30 Jun 2006 30 Jun 2005
Ore milled
Underground t"000 - 986
Surface t"000 - 884
Total t"000 - 1 870
Yield
Underground g/t - 5.44
Surface g/t - 0.96
Total g/t - 3.32
Gold produced
Underground oz - 172 522
kg - 5 366
Surface oz - 27 328
kg - 850
Total oz - 199 850
kg - 6 216
Cash operating costs US$/oz - 508
ZAR/kg - 101 701
ZAR/tonne - 338
Capital expenditure US$ m - 3.3
ZAR m - 20.3
EXPLORATION
Australasian operations
Vatukoula
On 20 April 2006, Emperor announced the implementation of the new ACDTP. The
plan includes the development of higher grade areas in the vicinity of
Philip Shaft and upgrading the associated shaft infrastructure. On 26 April,
Emperor entered into an agreement with the Government of Fiji, the Mine
Workers Union of Fiji and the Vatukoula Mine Workers Staff Association to
give effect to a major reorganization to ensure the long term future of the
mine. In addition, the entire workforce is undergoing a comprehensive
assessment, re-skilling and retraining programme. Over the next 18 months,
Emperor will invest F$27 million in capital expenditure. A Workers" Relief
Fund of F$300 000 has been committed by the Fijian Government to assist
employees.
Tolukuma
A comprehensive review of the regional exploration database has outlined
several new high priority prospects. Work will begin on these in the next
few months.
In late April, Emperor announced the discovery of two zones of high-grade
gold mineralisation in the Zine structure, a significant regional structure
that is parallel to the main Tolukuma Structure. This structure has
continued to return encouraging results from both drilling and underground
development with a considerable strike length of high-grade material being
identified. Drilling and development is in progress to bring the area into a
resource category as quickly as possible.
South African operations
Argonaut
A prospecting right for 969 hectares was granted on 6 February. An
application to extend this prospecting right by an additional 4 002 hectares
was submitted to the Department of Minerals and Energy (DME) on 26 June. The
application has been accepted, and response is awaited.
ERPM Extension 1
The ERPM Extension 1 Mineral Resource as at 30 June is as follows:
Category Mt g/t Contents gold Contents gold
t Moz
Measured 0.07 11.84 0.81 0.03
Indicated 2.66 13.18 35.04 1.13
Inferred 34.03 7.96 270.99 8.71
Total 36.76 8.35 306.84 9.87
The first prospect borehole has been completed. No geological structures,
water or gas have been intersected. Results are encouraging, and the hole
has been sampled under the supervision of an independent consultant.
Preliminary results of the assay, which will be subject to re-checking,
indicate that the reef is very well-developed, with a channel width of
162cm, and a value of 26.7g/t at that width, equating to 23.g/t over a
mining width of 188cm.
ERPM Extension 2
An application covering an area of 5 500.23 hectares was submitted to the
DME on 6 July. The application has been accepted, and a response is awaited.
The area has an exploration target of some 7-11 million ounces.
Public Participation Meetings in respect of ERPM Extensions 1 and 2 were
held on 28 July and 4 August respectively, and the reports arising from
these meetings have been submitted to the DME. Environmental Management
Plans (EMPs) must be submitted to the DME by 4 and 11 September
respectively. On receipt of the EMP, the DME has 120 days to approve or
reject the application.
INVESTOR INFORMATION
DIRECTORS - (*British)(**Australian)(***American)
Executives:
MM Wellesley-Wood (Chief Executive Officer)*
JWC Sayers (Chief Financial Officer)
Non-executives:
J Turk ***
Independent non-executives:
DJM Blackmur**; GC Campbell*; 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.
Johannesburg
23 August 2006
Date: 24/08/2006 08:00:45 AM Produced by the JSE SENS Department
