JOHANNESBURG (miningweekly.com) - Dual-listed gold recovery company DRDGold on Thursday posted a 27% year-on-year increase in operating profit to R219.9-million for the six months ended December 31, on the back of an 11% year-on-year increase in gold production to 75 267 oz.
The company, which is working to add Sibanye-Stillwater's West Rand tailings retreatment project to its portfolio, also posted a significant upswing in its free cash flow, to R63-million, up from the R9.7-million deficit in the prior comparable period.
Headline earnings a share improved to 14.3c, compared with a headline loss a share of 2.4c in the prior comparable period.
CEO Niël Pretorius explained at a presentation of the company's results, in Johannesburg, that the improved profit and production increase was as a result of a 15% rise in the average yield, to 0.191 g/t, despite a 4% drop in the average rand gold price.
The higher yield was derived from an improved performance at its Ergo tailings plant on the East Rand, attributable ongoing deployment and continued application of the plant's automated monitoring.
Meanwhile, DRDGold recorded a 7% decrease in all-in sustaining costs, with the main savings driven by lower cyanide consumption owing to Ergo's improved performance and the Central Water Treatment Facility having substantially reduced the miner's use of potable water sourced externally.
ERGO DISPUTE
Speaking to Mining Weekly Online, Pretorius said the company was hoping for an interim court date regarding its ongoing dispute with the Ekurhuleni municipality regarding a surcharge for the Ergo operation.
A hearing for the dispute has been set for December 8.
The municipality believed DRDGold had to pay a surcharge for services rendered, threatening to cut the Ergo plant's power supply if payment was not made.
DRDGold earlier this week indicated that it would pay the money into an attorney's trust and if the court adjudicated in its favour, DRDGold would regain access to this capital, which is currently R126-million.
However, the Gauteng High Court has now ordered the miner to pay the money in the trust to the municipality, as it the municipality had a Constitutional obligation to serve its communities.
Pretorius said while the miner would be tendering an amount, it would not be the full amount.