JOHANNESBURG (miningweekly.com) –JSE-listed gold producer DRDGold has returned to profit in the December quarter, posting headline earnings of 1,4c a share, from a 13,1c a share loss in the previous quarter.

In the December 2008 quarter, DRDGold recorded earnings of 13,6c a share.

The miner also reported a 4% increase in gold production to 59 866 oz in the last three months of 2009, which CEO Niël Pretorius said reflected continued production build-up at the ErgoGold surface retreatment operation and more ounces from its Crown and Blyvoor surface operations.

DRDGold’s second-quarter net profit grew to R6,4-million, compared with a loss of R63,3-million during the previous quarter, and profit of R33,4-million in the second quarter of 2008.

Total revenue for the quarter rose by 12% to R499,6-million, a consequence of improved gold production and a 12% increase in the average rand gold price received.

The gold miner said in a statement that after accounting for total cash operating costs, which was 4% lower at R416,5-million, operating profit was R87,4-million compared with the previous quarter’s R4,2-million loss.

Pretorius reported that surface gold production rose by 12% while gold from underground dropped by 11%.

“Lower-risk, lower-cost, higher-margin surface gold production now comprises more than 73% of DRDGold’s total.”

With an eye to further growth in terms of surface retreatment, Pretorius said that the company was close to making a decision on construction of a pipeline linking the Ergo and Crown operations, in order to exploit synergies between the two.

DRDGold is also looking to make an initial modest investment to establish a prospecting project in Zimbabwe’s highly prospective greenstone gold mining belt, in collaboration with a local partner.

Pretorius noted that the rand’s strong trending continued during the quarter and was showing little sign of softening against the major currencies. 

“For the near term our focus will, therefore, remain much of the same, reducing our risk exposure, controlling costs and managing margins.”

He added that at primary focus would be the Ergo operations, and the commissioning of the second feeder line from the Elsburg Tailings Complex and continuing its push for steady state production at the Brakpan plant.

“We will also continue to contribute towards stabilising Blyvoor’s underground operation, while retaining an option on its attractive surface retreatment potential,” said Pretorius.

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