[iafrica.com] -- DRDGOLD (DRD) increased headline earnings per share increased by 25 percent to 25 South African cents per share in the quarter ended December 31 2012.
DRDGOLD (DRD) increased headline earnings per share increased by 25 percent to 25 South African cents per share in the quarter ended December 31 2012.
The company declared an interim dividend of 14 cents per ordinary share.
A 37 percent increase in operating profit resulted from a 9 percent increase in gold production and a 7 percent increase in the average rand gold price received during the quarter.
DRD said group operating and financial results for the quarter were satisfactory‚ reflecting a solid performance from Ergo.
Ergo's new flotation/fine-grind project accounted for most of the miner’s R103.5 million in capital expenditure for the quarter. It is estimated R94.3 million will be spent on the flotation/fine-grind project over the next two quarters. A slight delay in the arrival of the mills from Canada is not expected to affect the attainment of full throughput by the end of the current financial year.
Cash operating unit costs were 7 percent lower at R284‚425/kg‚ reflecting the increase in gold production.
In Zimbabwe‚ DRD said current indications pointed to underground mining potential at Leny‚ Ascot‚ KT and particularly John Bull.
DRD said underground mining was not in line with its strategy‚ so these prospects would be packaged for sale. “We are currently finalising a feasibility study on the reclamation of gold tailings‚” it said.
DRD reported previously that it was working to unlock the value of ERPM‚ which has an inferred gold resource of about 21 million ounces. With the Cason Dump in the final stages of being removed‚ near-surface‚ underground ounces in this area have become accessible through ERPM's Cason Shaft.
The shaft has been refurbished and recommissioned at a cost of R12 million and the construction of a 6 000t/m plant has been completed at a cost of R13 million to provide near-term cash flows. “We expect these to make ERPM self-sustaining‚ in order to support the cost of exploration required to add to value to the gold resource. This asset is now held for sale and we will be appointing corporate advisors to assist in the process‚” DRD said.
During the quarter‚ DRD announced that three of its subsidiaries‚ collectively the Ergo Group‚ had entered heads of agreement with the Trans-Caledon Tunnel Authority‚ aimed at laying a foundation for a self-sustaining solution to acid mine drainage in the Central Witwatersrand Basin.
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