In the media

DRDGOLD considering Blyvoor offers, to name buyer in Dec

It is “highly probable” that DRDGOLD would sell the Blyvooruitzicht (Blyvoor) mine, which is under a business rescue process, to a local company, CFO Craig Barnes told Mining Weekly Online on Thursday.

JOHANNESBURG ( - It is “highly probable” that DRDGOLD would sell the Blyvooruitzicht (Blyvoor) mine, which is under a business rescue process, to a local company, CFO Craig Barnes told Mining Weekly Online on Thursday.

DRDGOLD, which wants to dispose of its 74% interests in the mine, indicated at its first-quarter results presentation in Johannesburg that it had received four separate offers for Blyvoor.

Barnes said it was critical for the successful bidder to understand the mining landscape in South Africa, to ensure the success of the operation into the future.

“We do not want another example as demonstrated by Pamodzi Gold and Aurora Empowerment Systems,” he commented.

The majority of the offers were from local companies.

CEO Niël Pretorius, who was pleased with the offers, stressed the importance of selling the mine to a “safe and responsible” bidder.

“It must bring value to shareholders, who have invested some R450-million in the mine over time, and to employees,” he added.

Further, the successful bidders needed to have a strong balance sheet with in-depth management skills.

Its board of directors is considering the offers and is expected to announce its decision during December.

Gold production at the mine was 29 000 oz, with underground gold output at 21 509 oz, reflecting a 9% improvement in underground yield to 3.64 g/t.

However, while operating profit for the mine was R46-million, compared with R3.4-million in the first quarter of 2011, cash operating costs increased 19% as a result of lower production compared with the previous quarter, electricity tariff increases and labour costs.


DRDGOLD has appointed an executive to optimise the East Rand Proprietary Mines (ERPM) extensions 1 and 2, for which it has a new order exploration right.

“This is a resource we don’t talk about a lot and is an isolated pocket, with an orebody situated away from current water cavities,” Pretorius explained.

Work undertaken on ERPM extension 1 and 2 indicated an estimated resource of 18-million ounces of gold at an in situ grade of 9 g/t.

The orebody is situated between 700 m and 1 200 m underground.

“We need to position the asset in such a way to as get some value recognition for it and want to be in a position by February to say this is how we are going to position this asset.

“We do not have the expertise to develop an underground mine but do have the expertise to say to market this is how much it is worth and do you want to come in and participate in the asset,” Pretorius explained.

The company continued to look at opportunities in Mozambique, and would probably tailor its position in the country similar to that of Zimbabwe, where it is currently is in a joint venture (JV) with a local company, Pretorius said.

Barnes said the company was well placed for any future projects in Zimbabwe, in light of the country’s indigenisation plan, as its JV fulfilled government policy.

Alluvial site scoping is under way in Zimbabwe, where the company sees “cautious growth” continuing, with 21 000 ha of land under in its portfolio.

Meanwhile, DRDGOLD reported that it had commissioned 44 km of its 50 km Crown/Ergo pipeline, linking the Crown’s City Deep plant south of Johannesburg with the Elsburg tailings complex pump station at Boksburg and with the Ergo’s Brakpan retreatment plant.

The remainder of the pipeline would be completed by year-end, with a remaining R50-million capital expenditure to be spent on the pipeline from October to March 2012.

Further, the completion and commissioning of the second carbon-in-leach circuit of Ergo’s Brakpan plant would be completed this month, increasing the plants retreatment capacity by 50% to 1.8-million tons a year.

DRDGOLD’s headline earnings a share jumped 150% to 20c in the first quarter, with an 82% increase in operating profit to R202.5- million for the quarter ended September 30.

Total gold production for the quarter was 1% higher at 63 562 oz and gold sold 7% higher at 65 523 oz.

Barnes said the company was on target to achieve a production target of about, or possibly more than, 260 000 oz for the financial year on the back of strong gold prices.

For the quarter, the average rand gold price received was 19% up at R395 568/kg, resulting in a 28% increase in revenue to R806.2-million. This was a 37 % increase in the gold price from the previous quarter.

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