Johannesburg, South Africa, 21 August 2008. DRDGOLD Limited (JSE: DRD; NASDAQ: DROO) declared a final dividend of 10 South African cents per ordinary share for the financial year ended 30 June 2008 which amounts to R37.7 million. CEO John Sayers said that the dividend was declared based on the current high gold price received.
Commenting on DRDGOLD’s results for the quarter and the year, he said that optimisation of the company’s South African operations and projects could deliver in the order of 400 000 ounces a year over time.
Total gold production for the quarter was 1% higher at 71 211 ounces, which reflected improved performance at both the Blyvoor and Crown operations. Blyvoor’s achievement was in spite of a previously reported illegal one-day work stoppage. Lower production at ERPM resulted both from a four-day disruption of operations related to xenophobic violence in communities close to the mine and the discontinuation of mining of two unprofitable longwalls.
Group revenue from continuing operations for the quarter was slightly lower at R495.4 million, mainly because of a 2% drop in the average gold price received to R224 552/kg. After accounting for cash operating costs which were 8% higher at R383.2 million, cash operating profit was 21% lower at R112.2 million. An impairment of R69.8 million relating to the discontinued unprofitable longwalls at ERPM was recorded, and net profit for the quarter was R44.5 million compared with the previous quarter’s R132.0 million, Sayers said.
The quarter brought to an end a challenging financial year in which DRDGOLD, having disposed of its interests in Australasia, had been focused on restoring the company’s South African business first to stability, then to a sustainable level of production, and after that to forming a platform for organic growth.
“From being an embattled gold miner trying unsuccessfully to make the best of a suite of mismatched assets in two vastly different geographic regions of the world, we have returned pretty much to our roots,” he explained.
The result was that once again DRDGOLD was a “distinctly South African gold miner doing what we do best - mining mature, deep-level mines and re-treating surface tailings”, Sayers said.
The company’s two-pronged plan - withdrawal from Australasia and the restoration of the South African operations to stability and then sustainable levels of profitable production - was the overriding reason for the 33% decline in gold production for the year ended 30 June 2008 to 321 432 ounces.
The plan had also helped to put the group on a sounder footing financially. From the previous year’s loss of R1 165.0 million, the group recorded a net profit of R1 225.1 million for the 2008 financial year, reflecting profit of R1 169.2 million from the disposal of the Australasian assets.
Revenue from continuing operations for the year was 20% higher at R1 843.9 million, the result of a 29% increase in the average gold price received to R192 143/kg. After accounting for cash operating costs, which were up by 14% to R1 479.6 million, cash operating profit for the year was 57% higher at R364.3 million.
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Many factors could cause the actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, adverse changes or uncertainties in general economic conditions in the markets we serve, a drop in the gold price, a continuing strengthening of the rand against the dollar, regulatory developments adverse to DRDGOLD or difficulties in maintaining necessary licences or other governmental approvals, changes in DRDGOLD’s competitive position, changes in business strategy, any major disruption in production at key facilities or adverse changes in foreign exchange rates and various other factors.
These risks include, without limitation, those described in the section entitled “Risk Factors” included in our annual report for the fiscal year ended 30 June 2007, which we filed with the United States Securities and Exchange Commission on 14 December 2007 on Form 20-F. You should not place undue reliance on these forward-looking statements, which speak only as of the date thereof. We do not undertake any obligation to publicly update or revise these forward-looking statements to reflect events or circumstances after the date of this report or to the occurrence of unanticipated events.