| Wed 28 Feb 2007, 8:00 | | DRD - DRDGOLD - Interim report for the quarter and |
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DRD
DRDD
DRD - DRDGOLD - Interim report for the quarter and six months ended 31
December 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")
INTERIM REPORT TO SHAREHOLDERS FOR THE QUARTER AND SIX MONTHS ENDED 31
DECEMBER 2006
GROUP RESULTS (Unaudited)
KEY FEATURES
- Blyvoor wins two safety awards
- DRDGOLD SA cash costs remain flat at US$505/oz
- DRDGOLD SA records second consecutive quarterly profit
- Prospecting right for ERPM Extension 2 granted
- US$66 million convertible bond fully repaid
- Porgera total reserves increase by 16%
- Australasian operations pursuing restructuring in order to retire debt
and to ensure the full potential value of DRDGOLD assets can be achieved
KEY RESULTS SUMMARY
GROUP Quarter Quarter %
Dec 06 Sep 06 Change
Attributable gold production*
Australasian operations oz 35 660 41 520 (14)
kg 1 109 1 290 (14)
Discontinued operation oz 9 143 17 338 (47)
Kg 284 539 (47)
South African operations oz 87 322 91 339 (4)
kg 2 716 2 841 (4)
Group oz 132 125 150 197 (12)
kg 4 109 4 670 (12)
Cash operating costs
Australasian operations US$/oz 541 528 (2)
ZAR/kg 127 967 121 792 (5)
Discontinued operation US$/oz 1 120 642 (74)
ZAR/kg 265 169 148 006 (79)
South African operations US$/oz 505 503 -
ZAR/kg 119 388 115 821 (3)
Group US$/oz 558 526 (6)
ZAR/kg 131 780 121 185 (9)
Gold price received US$/oz 617 625 (1)
ZAR/kg 145 909 143 963 1
Capital expenditure US$ million 11.5 14.2 19
ZAR million 84.5 101.6 17
6 months to 6 months to 6 months to
31 Dec 06 30 Jun 06 31 Dec 05
Attributable gold production*
Australasian operations oz 77 180 75 692 107 336
kg 2 399 2 354 3 340
Discontinued operation oz 26 481 8 963 19 434
Kg 823 279 605
South African operations oz 178 661 176 859 139 117
kg 5 557 5 501 4 327
Group oz 282 322 261 514 265 887
kg 8 779 8 134 8 272
Cash operating costs
Australasian operations US$/oz 534 425 323
ZAR/kg 124 646 86 138 67 891
Discontinued operation US$/oz 807 675 559
ZAR/kg 188 436 135 163 117 505
South African operations US$/oz 504 509 430
ZAR/kg 117 565 104 334 90 410
Group US$/oz 541 485 375
ZAR/kg 126 144 98 989 78 756
Gold price received US$/oz 621 598 467
ZAR/kg 144 892 122 122 98 131
Capital expenditure US$ million 25.7 40.9 17.6
ZAR million 186.1 262.6 114.5
* Emperor Mines Limited ("Emperor") consolidated 100% from 6 April 2006
(previously 39.52% attributable) and Crown Gold Recoveries (Pty) Limited
("Crown"), which included East Rand Proprietary Mines Limited
("ERPM"), consolidated 100% from 1 December 2005 (previously 40%
attributable).
STOCK
ISSUED CAPITAL
334 823 654 ordinary no par value shares
5 000 000 cumulative preference shares
Total ordinary no par value shares issued and committed: 351 168 446
STOCK TRADED JSE NASDAQ FRANKFURT
Avg. volume for the quarter
per day (000) 841 2 945 76
% of issued stock traded
(annualised) 66 230 6
Price - High R10.85 US$1.42 Euro 1.11
- Low R 6.11 US$0.84 Euro 0.67
- Close R 6.42 US$0.90 Euro 0.68
FORWARD LOOKING STATEMENTS
Many factors could cause the actual results, performance or achievements to be
materially different from any future results, performance or achievements that
many be expressed or implied by such forward-looking statements, including,
among others, adverse changes or uncertainties in general economic conditions
in the markets DRDGOLD serves, a drop in the gold price, a continuing
strengthening of the Rand against the Dollar, regulatory developments adverse
to DRDGOLD or difficulties in maintaining necessary licenses or other
governmental approvals, changes in DRDGOLD`s competitive position, changes in
business strategy, any major disruption in production at key facilities or
adverse changes in foreign exchange rates and various other factors.
These risks include, without limitations, those described in the section
entitled "Risk Factors" included in the annual report for the fiscal year
ended 30 June 2006, which was filed with the United States Securities and
Exchange Commission on 22 December 2006 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 on the occurrence of
unanticipated events.
OVERVIEW
Dear shareholder
Safety
It is with deep regret that I record the death of Blyvooruitzicht Gold Mining
Company Limited ("Blyvoor") employee Nkosana Sikhafungana, Tolukuma employees
Lawrence Aua and Linus Kopa, along with a Tolukuma contractor and a member of
the local community, in work-related incidents during the quarter under
review. Mr Sikhafungana was overcome by noxious gases in the underground fire
at Blyvoor`s No. 5 Shaft and the deaths at Tolukuma resulted from a helicopter
crash.
For the quarter, Blyvoor recorded substantial improvements in both its
disabling injury frequency rate ("DIFR") and reportable injury frequency rate
("RIFR"), the former from 13.1 to 6.28 and the latter from 6.55 to 3.01. Also
in January, the mine was awarded the Minister of Minerals and Energy`s Safety
Flag award for mines in the ultra-deep gold and platinum category. To achieve
the award, the mine recorded a 33% improvement in its RIFR, from 3.34 to 2.23,
over a three-year period. The Safety Flag award coincided with Blyvoor`s ninth
consecutive victory in the annual West Rand Mine Managers` Association Inter-
mine Safety Competition with an RIFR of 3.87.
The Crown surface operation recorded a significant improvement in its DIFR
during the quarter, from 9.16 to 3.74. The operation`s RIFR, however,
deteriorated from 1.14 to 1.26. ERPM, similarly, had a mixed safety
performance; its DIFR deteriorated from 13.29 to 15.39 while its RIFR improved
from 6.96 to 5.13.
At Tolukuma deteriorations were recorded in the lost time injury frequency
rate ("LTIFR") from 0 to 1.93, in the RIFR from 0 to 7.72, and in the DIFR
from 2.85 to 7.72.
A range of programmes are in place at each of the South African and
Australasian operations, designed to improve safety and health performance.
Production
Total gold production for the quarter was 12% lower at 132 125 oz, mainly as a
result of a 24% reduction in gold production from the Australasian operations.
While all three Australasian operations experienced production problems,
discussed in more detail in the operation-by-operation commentary overleaf,
the most seriously affected was the Vatukoula operation in Fiji, which was
placed on care and maintenance in December after a three-month review showed
that continued mining operations were not economically viable. Vatukoula`s
production for the quarter was just 9 143 oz, down 47% from the previous
quarter, reflecting not only the care and maintenance but the residual impact
of damage and subsequent down-time at Philip Shaft due to a skip/cage
incident.
At the South African operations, gold production was 4% lower at 87 322 oz.
While the Crown surface operation performed better following pipeline upgrades
and Blyvoor held its own in spite of an underground fire at Blyvoor No. 5
Shaft in December, underground faulting encountered at ERPM impacted
negatively on both volume and grade.
Financial
Group financial results for the quarter ended September 2006 have been re-
stated to account for the discontinuation of operations at Vatukoula and are
thus comparable with results for the quarter under review. Vatukoula incurred
a loss of R145.6 million in the quarter ended December 2006 and an impairment
of R783.1 million.
Revenue from continuing operations was 5% lower at R548.5 million and cash
operating costs declined by 4% to R466.3 million, resulting in a cash
operating profit of R82.2 million, down 7% on the previous quarter.
Revenue from the South African operations was 4% lower at R390.6 million and
after accounting for cash operating costs, which was 1% lower at R324.3
million, cash operating profit was R66.3 million, 14% down on the previous
quarter.
Revenue from the continuing Australasian operations was 6% lower at R157.9
million but a 10% reduction in cash operating costs to R142.0 million resulted
in a 39% increase in cash operating profit to R15.9 million.
In the quarter under review, DRDGOLD repaid its US$66m Convertible Bond.
Corporate developments
As was previously announced, I took over from Mark Wellesley-Wood as Chief
Executive Officer of DRDGOLD with effect from 1 January 2007. Mark served the
company as Chief Executive Officer and Executive Chairman for more than six
years. He is the Non-Executive Chairman of DRDGOLD South African Operations
(Pty) Limited ("DRDGOLD SA"). Group Financial Manager Kobus Dissel has been
appointed as CFO in an acting capacity.
Looking ahead
DRDGOLD`s operating and financial performance continued to be marred in the
quarter under review by the ongoing difficulties of the 78.72%-owned Emperor.
Shareholders will be aware that Emperor and DRDGOLD recently completed a
strategic review of the former, which concluded that Emperor should consider
either the divestment of key assets, or seek a suitable merger partner in
order to grow the value of its asset base. Emperor continues to pursue these
restructuring options, with the assistance of Rothschild Australia Limited.
Meantime, a new short-term finance facility, to be re-paid within an agreed
timeframe from the proceeds of restructuring, has been arranged with Australia
and New Zealand Banking Group Limited ("ANZ").
DRDGOLD regards DRDGOLD SA, in which it holds a 74% stake with black economic
empowerment ("BEE") partner Khumo Gold, as core to the group. While Blyvoor
has been adversely affected by illegal industrial action during the current
quarter, ERPM has received the pleasing news that its application to the
Department of Minerals and Energy ("DME") for a prospecting right over a
second portion of the neighbouring Sallies lease area has been granted. The
area, to be known as ERPM Extension 2, is 5 500 hectares in extent and has an
exploration target of 7-11 million ounces. This presents the exciting prospect
of a new deep-level mine with a life of more than 15 years. At the Crown
surface operation, a R10.5 million project for the reclamation of the 3L2
slimes dam has been approved, with the prospect of treating through the Crown
plant some 270 000 t per month at an average yield of 0.3 g/t over a 20-month
period. Crown has lodged its application for a mining right for the Top Star
dump on 1 February 2007.
John Sayers
Chief Executive Officer
NOTE REGARDING FINANCIAL INFORMATION
The condensed consolidated financial statements below are prepared in
accordance with International Financial Reporting Standards (IFRS).
* Period restated to account for the discontinued Vatukoula operation
in Fiji.
CONSOLIDATED Quarter Quarter
Income statement Dec 06 Sep 06
*Restated
(Unaudited) Rm Rm
Continuing operations
Gold and silver revenue 548.5 574.7
Cash operating costs (466.3) (486.1)
Cash operating profit 82.2 88.6
Corporate administration and other expenses (69.9) (43.1)
Share-based payments (0.5) (3.4)
Exploration costs (2.9) (4.2)
Care and maintenance costs (2.8) (2.1)
Cash profit from operations 6.1 35.8
Investments income 14.7 (9.4)
Finance charge (24.3) (15.2)
Net operating (loss)/profit (3.5) 11.2
Rehabilitation (3.1) (3.1)
Depreciation (39.5) (46.6)
Loss on financial instruments (1.4) (9.2)
Movement in gold process 37.1 16.0
Loss before taxation (10.4) (31.7)
Taxation 21.0 (15.3)
Deferred taxation (11.2) 2.6
Loss after taxation (0.6) (44.4)
Loss on sale of assets/investment (7.8) -
Impairments 15.6 -
Discontinued operations
Loss for the period from discontinued
operation (145.6) (36.0)
Impairment from discontinued operation (783.1) -
Net loss for the period (921.5) (80.4)
Attributable to:
Minority interest (194.1) (14.3)
Ordinary shareholders of the company (727.4) (66.1)
(921.5) (80.4)
Headline loss per share-cents
from continuing operations (12.7) (11.8)
from total operations (47.5) (20.6)
Basic loss per share-cents
from continuing operations (10.4) (11.8)
from total operations (220.9) (20.6)
Calculated on the weighted average
ordinary shares issued of: 329 252 570 321 092 406
Diluted headline loss per share-cents (12.7) (11.8)
Diluted basic loss per share-cents (220.9) (20.6)
6 months to 6 months to 6 months to
31 Dec 06 30 Jun 06 31 Dec 05
*Restated
Rm Rm Rm
Continuing operations
Gold and silver revenue 1 123.2 953.9 629.5
Cash operating costs (952.4) (776.7) (508.3)
Cash operating profit 170.8 177.2 121.2
Corporate administration and
other expenses (113.0) (45.0) (78.4)
Share-based payments (3.9) (6.5) (6.8)
Exploration costs (7.1) (15.6) (0.9)
Care and maintenance costs (4.9) (4.4) (4.8)
Cash profit from operations 41.9 105.7 30.3
Retrenchment costs - - (1.0)
Investments income 5.3 (85.3) 35.4
Finance charge (39.5) (19.6) (23.0)
Net operating profit 7.7 0.8 41.7
Rehabilitation (6.2) (31.2) (7.8)
Depreciation (86.1) (72.0) (71.4)
(Loss)/profit on financial instruments(10.6) 15.9 (7.5)
Movement in gold process 53.1 (15.9) 12.1
Loss before taxation (42.1) (102.4) (32.9)
Taxation 5.7 1.5 (17.3)
Deferred taxation (8.6) (26.7) 16.5
Loss after taxation (45.0) (127.6) (33.7)
(Loss)/profit on sale of
assets/investment (7.8) 93.0 (3.4)
Impairments 15.6 66.3 52.2
Loss from associates - (72.1) (79.9)
Discontinued operations
Loss for the period
from discontinued operation (181.6) (3.0) (6.3)
Impairment from discontinued
operation (783.1) - -
Net loss for the period (1 001.9) (43.4) (71.1)
Attributable to:
Minority interest (208.4) (3.2) (1.2)
Ordinary shareholders of the
company (793.5) (40.2) (69.9)
(1 001.9) (43.4) (71.1)
Headline loss per share-cents
from continuing operations (24.5) (64.8) (37.1)
from total operations (68.5) (63.9) (39.1)
Basic loss per share-cents
from continuing operations (22.1) (13.8) (21.0)
from total operations (244.0) (12.9) (23.1)
Calculated on the weighted average
ordinary shares issued of: 325 172 488 312 087 964 303 215 809
Diluted headline loss per share-cents (24.5) (64.8) (37.1)
Diluted basic loss per share-cents (244.0) (12.9) (23.1)
SEGMENTAL INFORMATION FOR THE QUARTER ENDED 31 DECEMBER 2006
South Africa Australasia Discontinued Other
Rm Rm Rm Rm
Gold and silver revenue 390.6 157.9 45.8 -
Cash operating costs (324.3) (142.0) (75.3) -
Cash operating profit/(loss) 66.3 15.9 (29.5) -
Corporate administration and
other expenses (18.3) (33.2) 0.2 (18.4)
Share based payments - - - (0.5)
Exploration costs - (2.9) (0.6) -
Care and maintenance costs - - - (2.8)
Cash profit/(loss) from
operations 48.0 (20.2) (29.9) (21.7)
Retrenchment costs - - (27.2) -
Investment income 2.3 (1.5) (1.6) 13.9
Finance charge (9.3) (1.5) (20.0) (13.5)
Net operating profit/(loss) 41.0 (23.2) (78.7) (21.3)
Rehabilitation (2.3) - (0.2) (0.8)
Depreciation (23.4) (17.1) (31.6) 1.0
Loss on financial instruments - (1.4) (22.3) -
Movement in gold process 0.6 36.5 (12.0) -
Profit/(loss) before taxation 15.9 (5.2) (144.8) (21.1)
Taxation (0.3) 21.2 (0.8) 0.1
Deferred taxation - (11.2) - -
Profit/(loss) after taxation 15.6 4.8 (145.6) (21.0)
SEGMENTAL INFORMATION FOR THE QUARTER ENDED 30 SEPTEMBER 2006
South Africa Australasia Discontinued Other
Rm Rm Rm Rm
Gold and silver revenue 406.2 168.5 67.4 -
Cash operating costs (329.0) (157.1) (79.8) -
Cash operating profit/(loss) 77.2 11.4 (12.4) -
Corporate administration and
other expenses (14.9) (16.0) (13.6) (12.2)
Share based payments - - - (3.4)
Exploration costs - (4.2) - -
Care and maintenance costs - - - (2.1)
Cash profit/(loss) from
operations 62.3 (8.8) (26.0) (17.7)
Retrenchment costs - - 1.0 -
Investment income 1.4 (2.5) 4.9 (8.3)
Finance charge (2.2) (7.4) (3.6) (5.6)
Net operating profit/(loss) 61.5 (18.7) (23.7) (31.6)
Rehabilitation (2.3) - (0.2) (0.8)
Depreciation (19.5) (34.4) (12.9) 7.3
(Loss)/profit on financial
instruments - (9.2) 5.0 -
Movement in gold process 0.8 15.2 (3.2) -
Profit/(loss) before taxation 40.5 (47.1) (35.0) (25.1)
Taxation (0.1) (15.2) (1.1) -
Deferred taxation - 2.6 - -
Profit/(loss) after taxation 40.4 (59.7) (36.1) (25.1)
CONDENSED CONSOLIDATED
Balance Sheet As at As at
31 Dec 06 30 Sep 06
(Unaudited) Rm Rm
Assets
Property, plant and equipment 680.3 2 016.1
Investments 61.8 39.0
Environmental trust funds 67.0 62.9
Other non-current assets - 245.7
Current assets 1 178.3 928.7
Inventories 109.5 260.5
Accounts receivables 68.4 123.8
Financial assets 9.8 12.2
Cash and cash equivalents 168.7 517.2
Assets classified as held for sale 821.9 15.0
1 987.4 3 292.4
Equity and Liabilities
Equity 109.5 1 093.3
Shareholders equity 77.1 850.2
Minority shareholders interest 32.4 243.1
Long-term borrowings 278.0 335.9
Post retirement and other employee benefits 21.1 20.7
Provision for environmental rehabilitation 335.1 332.4
Deferred mining and income taxes 99.5 96.2
Current liabilities 1 144.2 1 413.9
Accounts payable and accrued liabilities 450.5 541.3
Financial liabilities 207.5 199.3
Current portion of long-term borrowings 406.8 673.3
Liabilities classified as held for sale 79.4 -
1 987.4 3 292.4
As at As at
30 Jun 06 31 Dec 05
Rm Rm
Assets
Property, plant and equipment 1 850.6 863.0
Investments 38.9 145.8
Environmental trust funds 60.4 55.2
Other non-current assets 219.3 243.2
Current assets 835.6 348.6
Inventories 208.7 137.9
Accounts receivable 102.1 72.9
Financial assets 20.8 -
Cash and cash equivalents 489.0 137.8
Assets classified as held for sale 15.0 -
3 004.8 1 655.8
Equity and Liabilities
Equity 1 015.3 507.6
Shareholders equity 782.2 479.1
Minority shareholders interest 233.1 28.5
Long-term borrowings 403.0 11.9
Post retirement and other employee benefits 24.4 18.0
Provision for environmental rehabilitation 322.3 289.7
Financial liabilities - 7.5
Deferred mining and income taxes 92.0 74.7
Current liabilities 1 147.8 746.4
Accounts payable and accrued liabilities 407.5 380.2
Financial liabilities 183.4 -
Current portion of long-term borrowings 556.9 366.2
3 004.8 1 655.8
CONDENSED CONSOLIDATED Quarter Quarter
Statement of changes in equity Dec 06 Sep 06
(Unaudited) Rm Rm
Balance at the beginning of the period 1 093.3 1 015.3
Share capital issued 84.7 41.5
for acquisition finance and cash 88.2 40.0
for share options exercised 0.7 0.3
for increase in share-based payment reserve 0.5 3.4
for costs (4.7) (2.2)
Net loss attributed to ordinary shareholders (727.4) (66.1)
Net loss attributed to minority shareholders (194.1) (14.3)
Increase in minorities 18.5 -
Currency translation adjustments and other (165.5) 116.9
Balance as at the end of the period 109.5 1 093.3
Reconciliation of headline loss
Net loss (727.4) (66.1)
Adjusted for:
Impairments (15.6) -
Impairment from discontinued operation 783.1 -
Minority share of impairment from
discontinued operations (204.4) -
Loss on sale of assets 7.8 -
Headline loss (156.5) (66.1)
6 months to 6 months to 6 months to
31 Dec 06 30 Jun 06 31 Dec 05
Rm Rm Rm
Balance at the beginning
of the period 1 015.3 507.6 483.1
Share capital issued 126.2 111.4 98.4
for acquisition finance and cash 128.2 105.8 94.1
for share options exercised 1.0 2.5 1.0
for increase in share-based payment
reserve 3.9 6.5 6.8
for costs (6.9) (3.4) (3.5)
Net loss attributed to
ordinary shareholders (793.5) (40.2) (69.9)
Net loss attributed to minority
shareholders (208.4) (3.2) (1.2)
Increase in minorities 18.5 176.6 23.9
Currency translation adjustments
and other (48.6) 263.1 (26.7)
Balance as at the end of the period 109.5 1 015.3 507.6
Reconciliation of headline loss
Net loss (793.5) (40.2) (69.9)
Adjusted for:
Impairments (15.6) (66.3) (52.2)
Impairment from discontinued
operation 783.1 - -
Minority share of impairment from
discontinued operations (204.4) - -
Loss/(profit) on sale of assets 7.8 (93.0) 3.4
Headline loss (222.6) (199.5) (118.7)
CONDENSED CONSOLIDATED Quarter Quarter
Cash Flow Statement Dec 06 Sep 06
(Unaudited) Rm Rm
Net cash out flow from operations (84.2) (11.5)
Working capital changes 57.2 71.2
Net cash outflow from investing activities (72.1) (105.8)
Net cash (out)/in flow from
financing activities (203.4) 38.4
Decrease in cash and cash equivalents (302.5) (7.7)
Translation adjustment (46.0) 35.9
Opening cash and cash equivalents 517.2 489.0
Closing cash and cash equivalents 168.7 517.2
Reconciliation of net cash out flow from operations
Net operating (loss)/profit (2.7) 11.2
Net operating loss from discontinued operations(79.5) (23.6)
(82.2) (12.4)
Adjusted for:
Interest provision on convertible bond (7.0) 7.0
Amortisation of convertible cost 1.8 1.7
Financial instruments 23.7 4.2
Unrealised foreign exchange (gain)/loss (9.8) 16.4
Growth in Environmental Trust funds (2.3) (0.8)
Other non cash items 36.8 3.4
Interest paid (44.3) (12.2)
Taxation paid (0.9) (18.8)
Net cash outflow from operations (84.2) (11.5)
CONDENSED CONSOLIDATED 6 months to 6 months to 6 months to
Cash Flow Statement 31 Dec 06 30 Jun 06 31 Dec 05
(Unaudited) Rm Rm Rm
Net cash (out)/in flow from
operations (95.7) (14.2) 1.0
Working capital changes 128.4 (145.3) 8.7
Net cash outflow from investing
activities (177.9) (135.4) (97.3)
Net cash (out)/in flow from
financing activities (165.0) 566.5 (27.8)
(Decrease)/increase in cash and
cash equivalents (310.2) 271.6 (115.4)
Translation adjustment (10.1) 79.6 12.0
Opening cash and cash equivalents 489.0 137.8 241.2
Closing cash and cash equivalents 168.7 489.0 137.8
Reconciliation of net cash (out)/in flow from operations
Net operating profit 7.7 0.8 41.7
Net operating loss from
discontinued operations (102.3) (30.8) (6.3)
(94.6) (30.0) 35.4
Adjusted for:
Interest provision on convertible bond - 14.0 14.5
Amortisation of convertible cost 3.5 6.2 3.7
Financial instruments 27.9 - (3.7)
Unrealised foreign exchange
loss/(gain) 6.6 47.7 (28.1)
Growth in Environmental Trust
funds (3.1) (3.0) (2.6)
Other non cash items 40.2 1.8 11.5
Interest paid (56.5) (31.4) (19.3)
Taxation paid (19.7) (19.5) (10.4)
Net cash (out)/in flow from
operations (95.7) (14.2) 1.0
KEY OPERATING AND FINANCIAL RESULTS (Unaudited)
AUSTRALASIAN OPERATIONS
Porgera Quarter Quarter %
(20% of the Joint Venture) Dec 06 Sep 06 Change
Ore milled t`000 238 262 (9)
Yield g/t 3.09 3.48 (11)
Gold produced oz 23 664 29 379 (19)
kg 736 913 (19)
Cash operating costs US$/oz 396 401 1
ZAR/kg 93 834 92 539 (1)
ZAR/t 290 322 10
Cash operating profit US$ m 3.3 4.5 (27)
ZAR m 24.2 32.2 (25)
Capital expenditure (net)US$ m 2.8 1.8 (56)
ZAR m 19.9 12.9 (54)
6 Months to 6 months to 6 month to
31 Dec 06 30 Jun 06 31 Dec 05
Ore milled t`000 500 546 551
Yield g/t 3.30 2.94 4.33
Gold produced oz 53 043 51 625 76 613
kg 1 649 1 606 2 384
Cash operating costs US$/oz 399 288 274
ZAR/kg 93 117 58 056 57 682
ZAR/t 307 171 250
Cash operating profit US$ m 7.8 14.5 14.8
ZAR m 56.4 91.3 96.6
Capital expenditure (net)US$ m 4.5 8.2 8.8
ZAR m 32.9 52.0 57.3
Gold production for the quarter was 19% lower at 23 664 oz, reflecting a 9%
decline in throughput to 238 000 t and an 11% decrease in yield to 3.09 g/t.
Lower production was a consequence of both a 10-day shutdown to carry out
remedial work on a ball mill and clave brickwork and the Hides power
interruptions due to lightening strikes in early December. Lower grades from
the pit resulted in a lower than expected feed gold grade, 5% lower overall
than last quarter. Low-grade, long-term stockpiles provided lower than
expected grades but this was offset by higher-grade open pit and underground
ore.
Material mined and moved was below budget due to the removal of the West Wall
lower buttress and delays to Stage 4 mining associated with high-wall rock
fall conditions.
The West Wall cutback excavation is now 75% complete, the West Wall Upper
Buttress having been completed in December. The removal of the Lower Buttress
was a key focus of material movement.
Cash operating costs for the quarter were 8% higher at US$396/oz.
Tolukuma Quarter Quarter %
Dec 06 Sep 06 Change
Ore milled t`000 45 43 5
Yield g/t 8.29 8.77 (5)
Gold produced oz 11 996 12 141 (1)
kg 373 377 (1)
Cash operating costs US$/oz 827 835 1
ZAR/kg 195 319 192 634 (1)
ZAR/t 1 619 1 689 4
Cash operating loss US$ m (1.0) (3.0) 67
ZAR m (8.3) (20.8) 60
Capital expenditure (net)US$ m 1.6 2.0 20
ZAR m 11.8 14.3 17
6 months to 6 months to 6 months to
31 Dec 06 30 Jun 06 31 Dec 05
Ore milled t`000 88 92 101
Yield g/t 8.52 8.13 9.47
Gold produced oz 24 137 24 067 30 723
kg 750 748 956
Cash operating costs US$/oz 831 718 444
ZAR/kg 193 969 146 433 93 347
ZAR/t 1 653 1 191 884
Cash operating (loss)/profit
US$ m (4.0) (0.8) 0.1
ZAR m (29.1) (5.0) 0.4
Capital expenditure (net)US$ m 3.6 0.6 3.6
ZAR m 26.1 3.6 23.7
Gold production for the quarter was 1% lower at 11 996 oz, due to a 5% decline
in yield to 8.29 g/t. Throughput was 5% higher at 45 000 t.
Production for the quarter was negatively affected by the shutdown of the SAG
mill on 25 November after the discovery of serious damage. The mill re-started
on 8 December on completion of essential repairs. A helicopter crash in
October disrupted site logistics and also contributed to reduced production.
Mill feed from underground mining has been supplemented by low-grade surface
stocks. Underground mining remains focused on the Zine surface and production
resumed late in the quarter from the Gulbadi surface.
Cash operating costs for the quarter were 1% lower at US$827/oz.
DISCONTINUED OPERATION
Vatukoula ("Old" Emperor) Quarter Quarter %
100% Consolidated from 6 April Dec 06 Sep 06 Change
2006(Previously 39.52% attributable)
Ore milled t`000 37 80 (54)
Yield g/t 7.68 6.74 14
Gold produced oz 9 143 17 338 (47)
kg 284 539 (47)
Cash operating cost US$/oz 1 120 642 (74)
ZAR/kg 265 169 148 006 (79)
ZAR/t 2 035 997 (104)
Cash operating loss US$ m (4.1) (1.7) (141)
ZAR m (29.4) (12.4) (137)
Capital expenditure (net)US$ m 3.3 5.6 41
ZAR m 24.7 40.0 38
6 months to 6 months to 6 months to
31 Dec 06 30 Jun 06 31 Dec 05
Ore milled t`000 117 59 102
Yield g/t 7.03 4.73 5.93
Gold produced oz 26 481 8 963 19 434
kg 823 279 605
Cash operating costs US$/oz 807 675 559
ZAR/kg 188 436 135 163 117 505
ZAR/t 1 326 713 701
Cash operating loss # US$ m (5.8) (5.2) (4.5)
ZAR m (41.9) (32.8) (29.5)
Cash operating loss attributable
to DRDGOLD US$ m (5.8) (2.4) -
ZAR m (41.9) (15.6) -
Capital expenditure (net) #
US$ m 8.9 6.7 4.4
ZAR m 64.6 42.4 28.7
Capital expenditure (net) attributable
to DRDGOLD US$ m 8.9 3.6 -
ZAR m 64.6 23.3 -
# Represents total operation
Throughput for the quarter was 54% lower at 37 000 t and in spite of a 14%
increase in yield to 7.68 g/t, there was a 47% decrease in gold production to
9 143 oz.
Markedly lower production was a consequence of both of the month-long shut
down of Philip Shaft for repairs and the subsequent mine shutdown in early
December.
As previously announced, a skip-cage conveyance fell down the Philip Shaft on
14 October. This was repaired and returned to service on 14 November.
On 5 December 2006, after the completion of an extensive three-month review,
the Vatukoula Mine was placed on care and maintenance. The results of the
review concluded that continued mining operations were no longer economically
viable. There may be future potential for limited mining at Vatukoula and it
may be possible to carry out further exploratory work in the coming years in
order to look for ore resources that could be mined profitably, but more work
is needed to clarify whether such potential exists.
SOUTH AFRICAN OPERATIONS
Blyvoor Quarter Quarter %
Dec 06 Sep 06 Change
Ore milled
Underground t`000 183 182 1
Surface t`000 896 966 (7)
Total t`000 1 079 1 148 (6)
Yield
Underground g/t 5.06 5.15 (2)
Surface g/t 0.32 0.33 (3)
Total g/t 1.12 1.10 2
Gold produced
Underground oz 29 772 30 125 (1)
kg 926 937 (1)
Surface oz 9 099 10 352 (12)
kg 283 322 (12)
Total oz 38 871 40 477 (4)
kg 1 209 1 259 (4)
Cash operating costs
Underground US$/oz 582 627 7
ZAR/kg 137 586 144 491 5
ZAR/t 696 744 6
Surface US$/oz 313 293 (7)
ZAR/kg 73 926 67 565 (9)
ZAR/t 23 23 -
Total US$/oz 519 542 4
ZAR/kg 122 685 124 817 2
ZAR/t 137 137 -
Cash operating profit US$ m 3.5 3.2 9
ZAR m 25.4 23.0 10
Capital expenditure (net)US$ m 2.3 2.7 15
ZAR m 16.9 19.1 12
6 months to 6 months to 6 months to
31 Dec 06 30 Jun 06 31 Dec 05
Ore milled
Underground t`000 365 349 325
Surface t`000 1 862 1 847 1 787
Total t`000 2 227 2 196 2 112
Yield
Underground g/t 5.10 4.93 6.20
Surface g/t 0.32 0.35 0.32
Total g/t 1.11 1.08 1.23
Gold produced
Underground oz 59 897 55 362 64 816
kg 1 863 1 722 2 016
Surface oz 19 451 21 027 18 488
kg 605 654 575
Total oz 79 348 76 389 83 304
kg 2 468 2 376 2 591
Cash operating costs
Underground US$/oz 605 646 469
ZAR/kg 141 059 131 529 98 636
ZAR/t 720 649 612
Surface US$/oz 303 253 242
ZAR/kg 70 540 51 560 50 887
ZAR/t 23 18 16
Total US$/oz 531 538 419
ZAR/kg 123 772 109 517 88 040
ZAR/t 137 118 108
Cash operating profit US$ m 6.7 4.4 3.5
ZAR m 48.4 27.9 22.6
Capital expenditure (net)US$ m 5.0 4.6 4.2
ZAR m 36.0 29.4 27.4
Total gold production for the quarter was 4% lower at 38 871 oz, reflecting a
6% decline in total throughput to 1 079 000 t. Overall yield was 2% higher at
1.12 g/t.
The underground fire in the high-grade area at No. 5 Shaft contributed to the
quarter`s lower production but 90% of the affected stopes were back in
production within 48 hours and consequently, the impact was limited to a 1%
reduction in gold production to 29 772 oz. While throughput from underground
rose 1% to 183 000 t, underground yield was 2% lower at 5.06 g/t. The fire
slowed down development, which was 5% lower but opening up in the quarter rose
by 56%.
Repairs to the No. 6 Shaft infrastructure damaged in the previous quarter
continued together with investigative drilling of the Alpha Dyke.
Gold production for the quarter from surface sources was 12% lower at 9 099 oz
due to the combined impacts of early summer rains, pipe failures and the need
to raise the tailings dam disposal column. Surface throughput was 7% lower at
896 000 t and surface yield 3% down at 0.32 g/t.
Underground cash operating costs for the quarter were 7% lower at US$582/oz
and in spite of a 7% rise in surface cash costs to US$313/oz, total cash
operating costs were 4% lower at US$519/oz.
Crown Quarter Quarter %
100% Consolidated from 1 Dec Dec 06 Sep 06 Change
2005(Previously 40% attributable)
Ore milled t`000 2 231 2 056 9
Yield g/t 0.41 0.42 (2)
Gold produced oz 29 643 27 521 8
kg 922 856 8
Cash operating costs US$/oz 399 423 6
ZAR/kg 94 268 97 453 3
ZAR/t 39 41 5
Cash operating profit US$ m 6.2 5.5 13
ZAR m 46.0 39.1 18
Capital expenditure (net)US$ m 0.5 1.0 50
ZAR m 3.8 7.1 46
6 months to 6 months to 6 months to
31 Dec 06 30 Jun 06 31 Dec 05
Ore milled t`000 4 287 4 016 2 149
Yield g/t 0.41 0.36 0.42
Gold produced oz 57 164 47 036 28 923
kg 1 778 1 463 899
Cash operating costs # US$/oz 411 495 382
ZAR/kg 95 801 100 659 80 276
ZAR/t 40 37 34
Cash operating profit # US$ m 11.7 4.7 4.7
ZAR m 85.1 29.8 30.6
Cash operating profit attributable
to DRDGOLD US$ m 11.7 4.7 0.9
ZAR m 85.1 29.8 5.5
Capital expenditure (net) #
US$ m 1.5 2.9 2.0
ZAR m 10.9 18.4 13.2
Capital expenditure (net)
attributable to DRDGOLD US$ m 1.5 2.9 0.5
ZAR m 10.9 18.4 3.1
#Represents total operation
Reflecting the positive impact of pipeline upgrades in the previous quarter,
throughput increased by 9% to 2 231 000 t. In spite of a 2% decline in yield
to 0.41 g/t, gold production rose by 8% to 29 643 oz for the quarter.
Cash operating costs for the quarter were 6% lower at US$399/oz as a
consequence of the higher gold production.
A R10.5 million capital project for the reclamation of the 3L2 dam has been
approved. It is expected to recover from the site, and to retreat through the
Crown plant, some 270 000 t per month at an average yield of 0.3 g/t over a 20-
month period.
The company lodged its application to the DME for a mining right for the Top
Star mine dump on 1 February 2007, while its contesting of a two-year
moratorium on the recovery of the dump granted to heritage authorities is
scheduled to be heard in April.
ERPM Quarter Quarter %
100% consolidated from Dec 06 Sep 06 Change
1 Dec 2005(Previously
40% attributable)
Ore milled
Underground t`000 64 76 (16)
Surface t`000 388 435 (11)
Total t`000 452 511 (12)
Yield
Underground g/t 7.06 7.49 (6)
Surface g/t 0.34 0.36 (6)
Total g/t 1.29 1.42 (9)
Gold produced
Underground oz 14 532 18 325 (21)
kg 452 570 (21)
Surface oz 4 276 5 016 (15)
kg 133 156 (15)
Total oz 18 808 23 341 (19)
kg 585 726 (19)
Cash operating costs
Underground US$/oz 627 510 (23)
ZAR/kg 148 044 117 481 (26)
ZAR/t 1 046 880 (19)
Surface US$/oz 704 599 (18)
ZAR/kg 166 173 137 949 (20)
ZAR/t 57 49 (16)
Total US$/oz 644 529 (22)
ZAR/kg 152 166 121 879 (25)
ZAR/t 197 173 (14)
Cash operating (loss)/
profit US$ m (0.7) 2.1 (133)
ZAR m (5.1) 15.1 (134)
Capital expenditure (net)US$ m 1.2 1.1 (9)
ZAR m 8.5 8.1 (5)
6 months to 6 months to 6 months to
31 Dec 06 30 Jun 06 31 Dec 05
Ore milled
Underground t`000 140 149 76
Surface t`000 823 1 011 587
Total t`000 963 1 160 663
Yield
Underground g/t 7.30 8.50 7.88
Surface g/t 0.35 0.39 0.41
Total g/t 1.36 1.43 1.26
Gold produced
Underground oz 32 857 40 735 19 264
kg 1 022 1 267 599
Surface oz 9 292 12 699 7 626
kg 289 395 238
Total oz 42 149 53 434 26 890
kg 1 311 1 662 837
Cash operating costs #
Underground US$/oz 562 475 447
ZAR/kg 130 998 96 548 94 025
ZAR/t 956 821 752
Surface US$/oz 647 550 456
ZAR/kg 150 938 111 737 95 857
ZAR/t 53 44 40
Total US$/oz 581 493 450
ZAR/kg 135 394 100 158 94 525
ZAR/t 184 144 126
Cash operating profit # US$ m 1.4 5.2 0.6
ZAR m 10.0 33.2 3.8
Cash operating profit attributable
to DRDGOLD US$ m 1.4 5.2 (0.6)
ZAR m 10.0 33.2 (3.9)
Capital expenditure (net) #
US$ m 2.3 1.4 0.7
ZAR m 16.6 9.2 4.5
Capital expenditure (net) attributable
to DRDGOLD US$ m 2.3 1.4 0.2
ZAR m 16.6 9.2 1.4
# Represents total operation
Total gold production for the quarter was 18 808 oz, 19% down on the previous
quarter, reflecting lower gold production from both underground and surface
sources.
Lower extraction rates due to faulting in the eastern portion of the
underground mining area led to a 16% decline in underground throughput to 64
000 t. This, together with the mining of higher volumes of lower grade
material from above 70 level, contributed to a 6% decline in underground yield
to 7.06 g/t. Consequently, underground gold production was 21% lower at 14 532
oz.
Installation of both a new surface compressor and mud-pumping infrastructure
continued during the quarter. The latter, scheduled for completion by the end
of the December 2007 quarter, is expected to yield some 6 kg of gold a month
from the treatment of 2 000 t of mud with an average grade of 3.0 g/t.
ERPM`s ambitious, three-phase plugging project, designed to protect the mine`s
underground operations from rising water levels in the Central Witwatersrand
Basin, has progressed according to schedule and is expected to be completed by
the end of the June 2007 quarter.
Surface gold production for the quarter was 15% lower at 4 276 oz. An 11%
decline in throughput to 388 000 t resulted from water shortages, pipe and
pump failures, cable theft and power outages. Work to change the Cason Dump
face shape to improve safety and environmental controls led to a 6% drop in
yield to 0.34 g/t.
A project has begun to recover and treat residual surface material from the
ERPM lease area. It is expected to treat between 10 000 and 15 000 t per
month at an average grade of 1.00 g/t until December 2007, generating revenue
while substantially reducing environmental obligations.
Total cash operating costs for the quarter increased by 22% to US$644/oz,
reflecting lower gold production. Underground cash costs rose by 23% to
US$627/oz and surface cash costs by 18% to US$704/oz.
CASH OPERATING COSTS RECONCILIATION
AUSTRALASIAN OPERATIONS (R000 unless otherwise stated)
Tolukuma Porgera Continued Discontinued
JV (20%)Operations Vatukoula
Total cash costs
Dec 06 Qtr 90 006 39 474 129 480 114 894
Sep 06 Qtr 72 686 84 853 157 539 95 607
6 months to Dec 06 162 692 124 327 287 019 210 501
Movement in gold in process
Dec 06 Qtr (4 017) 40 494 36 477 (12 002)
Sep 06 Qtr 11 241 3 968 15 209 (3 215)
6 months to Dec 06 7 224 44 462 51 686 (15 217)
Less: Exploration, production
taxes, rehabilitation and other
Dec 06 Qtr 5 847 7 836 13 683 620
Sep 06 Qtr 4 437 1 325 5 762 -
6 months to Dec 06 10 284 9 161 19 445 620
Less: Retrenchment costs
Dec 06 Qtr - - - 27 162
Sep 06 Qtr - - - (1 009)
6 months to Dec 06 - - - 26 153
Less: Corporate and general
administration costs
Dec 06 Qtr 7 288 3 070 10 358 (198)
Sep 06 Qtr 6 867 3 008 9 875 13 626
6 months to Dec 06 14 155 6 078 20 233 13 428
Cash operating costs
Dec 06 Qtr 72 854 69 062 141 916 75 308
Sep 06 Qtr 72 623 84 488 157 111 79 775
6 months to Dec 06 145 477 153 550 299 027 155 083
Gold produced (kg)
Dec 06 Qtr 373 736 1 109 284
Sep 06 Qtr 377 913 1 290 539
6 months to Dec 06 750 1 649 2 399 823
Cash operating costs (R/kg)
Dec 06 Qtr 195 319 93 834 127 968 265 169
Sep 06 Qtr 192 634 92 539 121 791 148 006
6 months to Dec 06 193 969 93 117 124 647 188 436
Cash operating costs (US$/oz)
Dec 06 Qtr 827 396 541 1 120
Sep 06 Qtr 835 401 529 642
6 months to Dec 06 831 399 535 807
SOUTH AFRICAN OPERATIONS(R000 unless otherwise stated)
Crown ERPM Blyvoor Total
Total cash costs
Dec 06 Qtr 93 703 94 829 153 520 342 052
Sep 06 Qtr 89 650 94 418 162 201 346 269
6 months to Dec 06 183 353 189 247 315 721 688 321
Movement in gold in process
Dec 06 Qtr 33 187 419 639
Sep 06 Qtr 241 (38) 587 790
6 months to Dec 06 274 149 1 006 1 429
Less: Exploration, production
taxes, rehabilitation and other
Dec 06 Qtr 2 943 2 064 1 443 6 450
Sep 06 Qtr 2 643 1 960 1 374 5 977
6 months to Dec 06 5 586 4 024 2 817 12 427
Less: Retrenchment costs
Dec 06 Qtr - - - -
Sep 06 Qtr - - - -
6 months to Dec 06 - - - -
Less: Corporate and general
administration costs
Dec 06 Qtr 3 878 3 935 4 170 11 983
Sep 06 Qtr 3 828 3 936 4 270 12 034
6 months to Dec 06 7 706 7 871 8 440 24 017
Cash operating costs
Dec 06 Qtr 86 915 89 017 148 326 324 258
Sep 06 Qtr 83 420 88 484 157 144 329 048
6 months to Dec 06 170 335 177 501 305 470 653 306
Gold produced (kg)
Dec 06 Qtr 922 585 1 209 2 716
Sep 06 Qtr 856 726 1 259 2 841
6 months to Dec 06 1 778 1 311 2 468 5 557
Cash operating costs (R/kg)
Dec 06 Qtr 94 268 152 166 122 685 119 388
Sep 06 Qtr 97 453 121 879 124 817 115 821
6 months to Dec 06 95 801 135 394 123 772 117 565
Cash operating costs (US$/oz)
Dec 06 Qtr 399 644 519 505
Sep 06 Qtr 423 529 542 503
6 months to Dec 06 411 581 531 504
EXPLORATION AND DEVELOPMENT
FIJI
Vatukoula
Limited underground exploration was undertaken in the Philip Shaft section
prior to the cessation of mining.
A commercial and technical review of mine site and near mine exploration was
completed. This involved data compilation, integration and interpretation and
was aimed at identifying new near mine exploration targets. A number of target
areas have been defined to be of interest.
Fiji Regional
No regional exploration work was carried out elsewhere in Fiji. Historical
data on the Tuvatu Project was reviewed in preparation for additional work in
this area. Regional programs for all other surface permits were reviewed.
PAPUA NEW GUINEA
Tolukuma
Exploration activity at Tolukuma continued to concentrate on the Zine and
Fundoot structures. Minor drilling was undertaken on the Triple M structure to
the east of Zine. Surface trenching aimed at generating drill targets
continued in the Degot/Fundoot area and in areas further south of the lease.
An exploration review workshop conducted during the month of November
identified multiple exploration targets within the Tolukuma corridor. From
late November to December exploration activity was scaled down (as a result of
the SAG mill breakdown) and is yet to return to full capacity.
In the next (January - March 2007) quarter exploration will continue to be
focused on delineation and extensional drilling of the Zine and Fundoot South
structures. Intensive drilling is planned to fully test the Zine structure as
soon as access to appropriate underground locations become available. Surface
trenching and mapping will continue to the southern part of the lease into the
Aivelolop and Kagam structures. The Aivelolop structure will be tested with
several drill holes both from the surface and underground.
Zine Exploration Drilling & Underground Development
The Zine structure continued to be tested by drilling and underground
development in an effort to define the extents of the mineralisation. Within
the Zine Mid section underground development has been carried out from 1525 up
to 1565 and down to 1505 levels. On 1505 level development face grades of up
to 1.8m @ 190.7 g/t Au (uncut) have been obtained from the central section of
the Zine Mid pod. Drilling to date has indicated mineralisation within the
Zine Mid pod to extend at least 160m below current developments at 1505 level.
Initial surface drilling results of the Zine North section have not been
encouraging but the presence of the structure has been confirmed and the lower
sections (below 1495 level) are yet to be tested. Further testing is yet to be
carried out in the Zine South and Zine Far South areas.
Drilling Results from October - December 2006*
Hole No. Intersection Comments RL (m) Core
Recovery %
TU084 2.08m @ 2.25 g/t Au Zine Mid North 1322 100
and 4.4 g/t Ag
TU085 No significant Zine Mid South 1405 100
mineralisation
ZN087 0.62m @ 6.38 g/t Au Zine North 1556 96
and 24.6 g/t Ag
ZN088 2.0m @ 0.86 g/t Au Zine North 1510 100
and 13.5 g/t Ag
ZN089 0.40 @ 6.23 g/t Au Zine North 1495 70
and 24.9 g/t Ag
* Assay results are uncut; Intersection widths calculated based on angle to
core axis
Fundoot Exploration
The upper zones of the Fundoot structure continued to be tested from the
surface with mixed results. A mechanical trenching exercise using an excavator
to expose the top of the vein (in areas of overburden cover) is planned for a
150m wide zone.
Drilling Results from October - December 2006*
Hole No. Intersection Comments RL (m) Core
Recovery %
IV026 0.40m @ 34.08 g/t Au Fundoot 1600 100
and 5.21 g/t Ag
TU027 0.75m @ 5.31 g/t Au Fundoot 1600 100
and 25.0 g/t Ag
ZN028 No significant Fundoot 1632 100
mineralisation
ZN029 0.27m @ 39.73 g/t Au Fundoot 1584 100
and 121.0 g/t Ag
ZN031 0.30m @ 21.21 g/t Au HW Splay 1560 100
and 43.4 g/t Ag
ZN033 0.83 @ 10.39 g/t Au Fundoot 1585 100
and 161.5 g/t Ag
ZN034 0.77 @ 2.93 g/t Au Fundoot 1529 100
and 21.2 g/t Ag
ZN035 0.95@ 0.35g/t Au Fundoot 1643 86
And 24.1 g/t Ag
*Assay results are uncut; intersection widths calculation based on angle to
drill core axis
Regional Program
The company maintains eleven Exploration Licenses. A major technical review
of all exploration tenements completed earlier this year highlighted multiple
prospects with several areas requiring advanced stage exploration and
drilling. Field work in EL1271 and 1366 has commenced and planning for work in
ELs 894 and 683 is underway. Weather problems difficulty in employing
additional geologists and field personnel and the unavailability of
helicopters greatly restricted the scope of work. Further data interpretation
is in progress.
An assessment of the porphyry associated copper and gold potential within
Emperor`s regional ELs is underway.
Field work was completed in the Ipi Creek EL1352 during the previous quarter.
Compilation of field results has shown that porphyry copper type alteration
and mineralisation occurs in the area centered on a small intrusive stock. A
collapsed diatreme breccia has also been interpreted to occur in the Ipi area
and further work is aimed at delineating the diatreme and to further map and
sample the area.
Results of soil sampling at Belavista in EL1284 during the previous quarter
has shown a 1 km x 1 km area to be anomalous in Au with co-incident As, Hg and
Pb anomalies. This is interpreted to be due to mineralisation within the
regional Goilala Fault structures that occur in the area. Samples taken across
discrete structures within the Goilala Fault zone returned assays of 0.46 ppm
Au, 5.5 ppm Ag, 0.14% Cu and 0.1% As, and 6.32 ppm Au, 20 ppm Ag, 0.12% Cu and
0.7 % As. Further work is planned for the area to test strike extensions of
the two structures and to expose additional structures that may be responsible
for the soil anomaly observed in the area.
Porgera Joint Venture
The Porgera Deeps drilling program continued with 2 holes being drilled, one a
re-drill that was again abandoned due to difficult drilling conditions.
Drilling at Tupagai (located immediately north of Porgera) is expected to
historical mapping data. Additional targets have been identified based on
coincident geochemical and geophysical anomalies in favourable litho-
structural positions within the Porgera Transfer Zone.
SOUTH AFRICA
ERPM
ERPM Extension 1 (Sallies)
The second and third exploration boreholes have been completed and surveyed to
assist with geological interpretation. Assays and check assays have been
conducted.
Borehole assay results:
BH No. 2 Channel Value 11.11 g/t / 64 cm (715 cmgt)
BH No. 3 Channel Value 2.45 g/t / 227 cm (556 cmgt)
A fourth exploration borehole is being drilled to determine extent of
paleohigh and is currently at 32.3 m. An additional machine has begun drilling
within the ERPM lease area.
On completion of the fourth borehole, drilling will be concentrated within the
mine lease area to firm up on geological structures.
ERPM Extension No. 2
The prospecting right for ERPM Extension 2 was granted. The area covers 5
500.231 hectares to the east of the ERPM Extension 1 (Sallies) prospecting
area, which incorporates the southern sections of the old Van Dyk mining lease
area and a small portion of Sallies. The area has a potential exploration
target of some 7-11 million ounces, which could result in the development of a
deep-level mine with a life of mine in excess of 15 years.
BLYVOORUITZICHT
Savuka Exploration - Alpha Dyke
The current depth of the exploration borehole, drilling of which was suspended
during the quarter due to the Blyvoor No. 5 Shaft underground fire, is 81.4 m.
Tenders for the diamond drilling contract closed on 23 January 2007. On
awarding of the contract, additional drilling will be undertaken to firm up on
geology and valuation down dip of current mining operations.
CROWN
Elsburg exploration drilling results:
4L50 dump: 17 holes were drilled on a 200 x 200 m grid. A resource of 18.6
million tons at 0.251 g/t has been determined.
4L 48 dump: 24 holes were drilled on a 200 x 200 m grid. A resource of 80.8
million tons at 0.351 g/t has been determined.
4L 47 dump: 32 holes were drilled on a 200 x 200 m grid. A provisional
valuation of 37.8 million tons at 0.261 g/t has been determined and while test
work remains to be completed, no significant changes are expected.
3/L/10 and Angelo: drilling of the ERGO portions has been completed and assay
results are awaited.
WPU Slime Roodepoort: drilling of slimes for toll treatment has been completed
and results are awaited.
ARGONAUT
A desktop survey has been conducted, using historical geophysical information,
to confirm that the proposed borehole is sited favourably in terms of
structure and grade.
INVESTOR RELATIONS
DIRECTORS - (*British)(**Australian)(***American)
Executive:
JWC Sayers (Chief Executive Officer)
Non-executives:
J Turk ***
Independent non-executives:
DJM Blackmur** (Senior Non-Executive Director); GC Campbell*(Non-Executive
Chairman); RP Hume
Alternate:
JH Dissel
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
28 February 2007
Date: 28/02/2007 08:00:01 Produced by the JSE SENS Department.
