In the media

DRDGOLD reports FY profit, names Pretorius CEO-designate

[Miningweekly] - JSE-listed gold producer DRDGOLD on Thursday reported a 33% decline in production for the year ended June 2008, to 321 432 oz, but recorded a net profit of R1,23-billion, after disposing of the company’s Australasian assets.

JSE-listed gold producer DRDGOLD on Thursday reported a 33% decline in production for the year ended June 2008, to 321 432 oz, but recorded a net profit of R1,23-billion, after disposing of the company’s Australasian assets.

John Sayers

This compared with the company’s loss of R1,17-billion in 2007. Adjusted headline earnings from continuing operations for the year were up from 3,8c share, to 64,9c a share, which “brought to an end a challenging financial year, and put the group on a sounder footing financially”, DRDGOLD said.

The company also declared a long-awaited dividend to shareholders of 10c a share, amounting to R37,7-million.

The company’s strategy to withdraw from Australasia, and focus on restoring its South African operations to stability and then sustainable levels of production, allowed DRDGOLD to once again become a “distinctly South African gold-miner doing what it does best - mining mature, deep-level mines and re-treating surface tailings”, said CEO John Sayers.

Revenue from continuing operations for the year was 20% higher at R1,8-billion - the result of a 29% increase in the average gold price received to R192 143/kg. The company added that cash operating costs were up by 14% to R1,4-billion, thus cash operating profit for the year was 57% higher at R364,3-million.

DRDGOLD also announced the appointment of Niel Pretorius, currently DRDGOLD South Africa MD, as CEO-designate and an executive director of the company. Pretorius would take over as CEO of DRDGOLD in January 2009, following the retirement of Sayers on December 31, 2008.

Total gold production for the quarter was 1% higher at 71 211 oz, which reflected improved performance at both the Blyvoor and Crown operations. Blyvoor’s achievement was in spite of a previously reported illegal one-day strike.

Niel Pretorius

Lower production at East Rand Proprietary Mines (ERPM) resulted 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 fourth quarter was slightly lower at R495,4-million, attributed to a 2% drop in the average gold price received to R224 552/kg, while cash operating costs were 8% higher at R383,2-million, thus cash operating profit was 21% lower at R112,2-million.

DRDGOLD said that 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-million.

Sayers said that optimisation of the company’s South African operations and projects could deliver in the order of 400 000 oz/y over time.

“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,” Sayers stated.

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