DRDGold CEO Niël Pretorius
Dual-listed DRDGold has declared a final dividend of 40c apiece for the financial year ended June 30.
Speaking to Mining Weekly on August 25, CEO Niël Pretorius acclaimed that it was a successful year for the group, with this marking the fourteenth consecutive financial year of DRDGold declaring dividends.
The gold miner also achieved 99% of the upper limit of its production guidance and exceeded its cash operating cost guidance of R535 000/kg by just 1%.
At year-end, the company also remained debt-free.
DRDGold’s operating profit increased by 39% year-on-year to R2.2-billion.
The group’s total gold production increased by 6% to 5 723 kg, reflecting an 11% increase in throughput.
Group cash operating unit costs were 12% higher at R540 338/kg. The key drivers of the increase were the decrease in yield at Ergo, a 15% electricity tariff increase by State-owned power utility Eskom which came into effect in April and the first full year of milling at DRDGold's Far West Gold Recoveries (FWGR) operation in the North West.
Headline earnings were 127% higher year-on-year at R1.4-billion, compared with headline earnings of R634.5-million in the comparative period.
“By producing and selling more gold at a substantially higher average rand gold price and containing working cost increases reasonably well, we recorded a much higher operating profit.
“Importantly, with a view to the future, we were also able to initiate – and in some cases complete – important capital projects at both of our operations.
“All of these are intended to help us do more of what we do, better. We have begun, and will continue in the months ahead, to report regularly to stakeholders on our various improvement initiatives,” Pretorius said.
He cited the introduction of a new R12-million copper elution circuit at FWGR as one of the key improvement initiatives. The new circuit will improve payable gold content and deliver an additional 1.2 kg to 1.8 kg of gold a month.
Moreover, DRDGold’s subsidiary Ergo Mining has begun reclamation – at a R3.8-million set-up cost – of the 2.7-million-tonne 4L25 mine dump.
This is integral to sustaining production at Ergo and will free up a considerable land patch.
The dump is estimated to contain about 850 kg of gold.
Pretorius also highlighted the company’s focus on environmental, social and governance (ESG) matters, with notable milestones during the period including a 12% increase in externally sourced potable water, R105-million spent on rehabilitation and 115 ha of tailing deposition facilities vegetated.
Moreover, R48.9-million was spent on socioeconomic development.
OUTLOOK
Pretorius noted that, along with the rest of the country’s mining industry, DRDGold is encouraging vaccination against Covid-19 among its employees and is facilitating the process in cooperation with the relevant health authorities.
He said the global economy was responding more and more to environmentally responsible energy generation and green energy solutions, adding that DRDGold is aligning itself with the strategy of Sibanye-Stillwater to create these clean energy solutions.
DRDGold has set its 2022 production guidance at between 160 000 oz and 180 000 oz and its cash operating unit cost guidance at about R600 000/kg.
It estimates its capital expenditure for 2022 will be about R600-million.
At Ergo, DRDGold's plans to build a solar power project are continuing as is its plan to increase deposition capacity.
At FWGR, plans continue for the development of Phase 2.
Moreover, the copper elution facility mentioned earlier is now online, which is set to improve the quality of gold in bullion.