JSE- and NYSE-listed DRDGold expects to report earnings per share (EPS) of between 106.2c and 115.8c apiece for the six months ended December 31, 2020.

This compares with the EPS of 48.5c apiece reported for the six months ended December 31, 2019.

The company attributes the expected increase in earnings to movements in revenue, cash operating costs and its weighted number of ordinary shares.

The weighted average number of ordinary shares increased by 24% year-on-year to 855-million, owing to shares issued to gold miner Sibanye-Stillwater, which now holds a 50.1% interest in DRDGold.

In the period under review, DRDGold’s revenue increased by R866-million, or 41%, year-on-year, to almost R3-billion, compared with the revenue of R2.1-billion reported in the prior comparable period.

In turn, the revenue increase can be attributed to the Ergo operation, in Brakpan, recording a 42% increase in the rand gold price achieved and a 1% increase in gold sold.

Gold sold from the Far West Gold Recoveries (FWGR) surface retreatment operation, in Carletonville, was 5% lower, however, owing to lower grades as reclamation progressed toward a lower-grade central portion of the Driefontein No 5 dump.

The impact of the increase in revenue on earnings was moderated by an increase in cash operating costs of R141.5-million, or 10%, year-on-year in the period under review, to R1.5-billion.  

DRDGold explains that cash costs increased by R116-million at Ergo, owing to a 3% increase in volume throughput and the use of more reagents, while the cash operating costs at FWGR, which was not operational for the whole of the prior comparable period, increased by almost R25-million, as a result of increased costs associated with milling.

As at December 31, 2020, DRDGold’s cash and cash equivalents stood at R2.1-billion, with a revolving credit facility of R200-million available if needed.

The company remains free of bank debt, while its liquidity is being enhanced by the current high rand gold price levels.

DRDGold will publish its interim results on or about February 16.