As a result of the increase in yield, cash operating costs per kilogram of gold sold decreased marginally from the previous quarter to R689,426/kg. Cash operating costs per tonne of material increased from the previous quarter to R170.3/t due to a decrease in the ore treated, the result of the reclamation of final remnant and clean up material at sites as they near depletion at both operations.
More importantly, the gold producer reported $26.24 million in adjusted EBITDA for its Q3 – up a whopping 54% versus the previous quarter. DRDGOLD shares are already up more than 75% for the year at writing.
In its operating update for the quarter ended March 31, 2023, the gold tailings retreatment group said production rose by 4% to 1329 kg in the reported period as the yield increased to 0.030g per tonne from 0.255g per tonne, which lowered the cash operating costs per kilogram slightly to R691 061 per kg.
Production at one of the world’s largest gold tailings retreatment companies, DRDGold, edged higher in the latest quarter following a higher yield and it remains in a “favourable” position to pay a final dividend in August.
The company said that as a result of the increase in yield, cash operating costs per kilogram decreased marginally to R689,426/kg from R691,061/kg, adding that all-in sustaining cost (AISC) per kilogram was R790,471/kg, decreasing quarter-on-quarter (R844,697/kg) mainly due to a decrease in sustaining capital expenditure.
The company also reports its all-in sustaining cost (AISC) per kilogram was R790 471/kg in the quarter, which is lower than the prior quarter’s AISC of R844 697/kg, mainly owing to a decrease in sustaining capex.
It was last trading at R24.22 per share valuing the company at R20.9bn. DRDGold shares are also at their highest level since August 2020 and comes on a day when the gold price surged back through $2,000 per ounce – elevating other local gold shares.
With the volume of tailings deposits globally increasing at a faster rate than it did in the last century, it has become prudent for mining companies to ensure minimal risks to surrounding environments and communities, including through constant collaborative innovation and meaningful community engagement.
DRDGold CEO Niël Pretorius said for some time, neglect and corruption had eroded delivery at key state-owned entities, Transnet and Eskom in particular. “It seems as though certain elements within the ruling party – desperate to cling to the state’s monopoly on electricity supply – are frustrating efforts to decentralise and privatise power generation."
Areas in which cable theft is rife may eventually be left off the power grid as it is economically unsustainable to keep replacing infrastructure, especially if power provision becomes partially privatised, says DRDGold CEO Niël Pretorius. The 128-year old debt-free company, founded as Durban Roodepoort Deep in 1895, released half-year results on Wednesday, noting revenue grew 6% thanks to a rising gold price.
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Results for the six months ended 31 December 2023 14 February 2024 (PDF - 11.41 MB)
Results for the six months ended 31 December 2023 (PDF - 34.46 MB)