Gold miner DRDGold, which is finalising its financial results for the year ended June 30, reports that its earnings per share (EPS) and headline earnings per share (HEPS) are likely to be between R16.01 and R17.65, which will be a year-on-year increase of between 94% and 114%.

The expected increases in EPS and HEPS are primarily the result of increases in revenue and gold recoveries.

The miner’s revenue increased by 26% year-on-year to R5.26-billion, while DRDGold’s Ergo Mining business’ revenue increased by 29% in the period under review, to R3.94-million.

The Ergo revenue increase was mainly owing to a 20% increase in the rand-denominated gold price received by DRDGold, as well as a 7% increase in gold sold.

Also for Ergo, volume throughput increased by 13% to mitigate a 6% decrease in yield owing mainly to the previously reported depletion of high-grade reserves available to the Knights plant.

The Far West Gold Recoveries (FWGR) operation’s revenue increased by 18%, to R1.32-billion, owing mainly to a 18% increase in the rand-denominated gold price received, as well as a 1% increase in gold sold.

Volume throughput for FWGR increased by 2% as yield remained stable at 0.237 g/t.

At the end of the financial year, DRDGold’s cash and cash equivalents was R2.18-billion, up from the R1.71-billlion reported for the end of the 2020 financial year.

During the 2021 financial year, DRDGold generated free cash flow (cash inflow from operating activities less cash outflow from investing activities) of R1.1-billion and paid cash dividends of R640.9-million.

The group remains free of any bank debt.

As for cash operating costs, the miner reports that the impact of the increase in revenue on earnings and headline earnings was moderated by a 17% increase in cash operating costs, which totalled R3.07-billion for the period.

At Ergo, cash operating costs increased by 17%, to R2.66-billion, owing to the 13% increase in volume throughput, an increase in the use of reagents and a 15% increase in the cost of power in April.

At FWGR, cash operating costs increased by 15%, to R406.2-million, mostly as a result of increased costs associated with milling, which was not operational for the whole of the previous corresponding period.

DRDGold will publish its results on August 25.