DRDGOLD Limited CEO Niël Pretorius says the company has reported “satisfactory” results for the quarter ended 31 December 2012, reflecting a “solid performance” from surface retreatment subsidiary Ergo. “Consequently, we are delighted to declare an interim dividend of 14 South African cents per ordinary share,” Pretorius said
A 37% increase in operating profit to R238.7 million resulted from a 9% increase in gold production to 39 031oz and a 7% increase in the average Rand gold price received to R478 309/kg. Cash operating costs were 12% lower at US$1 017/oz. Headline earnings per share increased by 25% to 25 South African cents per share. Talking to Ergo’s “next growth chapter” – the flotation/fine-grind circuit, currently under construction, and expected to improve extraction efficiencies by between 16 and 20% – Pretorius said this had accounted for most of the R103.5 million capital expenditure incurred in the quarter.

A further R94 million is likely to be spent on the new circuit over the next two quarters, he said, with attainment of full throughput expected on schedule by the end of FY2013, in spite of a slight delay in the arrival of the mills from Canada. Turning to DRDGOLD’s ERPM asset, Pretorius said its Cason Shaft had been refurbished and recommissioned at a cost of R12 million, and a 6 000tpm plant constructed at a cost of R13 million. “We expect these to make ERPM self-sustaining, in order to support the cost of additional underground exploration required to add value to the current inferred gold resource of approximately 21 million ounces. This asset is now for sale.”
Pretorius said that – in respect of four of the five prospects held by its ChizimGold Joint Venture in Zimbabwe – underground mining is indicated; and as this does not feature in DRDGOLD’s strategy, these prospects would be packaged for disposal. Prospects for gold tailings reclamation in the country are being evaluated currently. Looking ahead, Pretorius said DRDGOLD’s priority remains delivery on its FY2013 targets. In Q3 and Q4, there will be continued focus on maintaining Ergo’s tonnage volumes and on completion of the flotation/fine-grind circuit.