Media releases

DRD performance improvement continues

Durban Roodepoort Deep, Limited (DRD) reported “creditable” improvements in performance in the second quarter of the financial year compared with the previous quarter, said Chairman and CEO Mark Wellesley-Wood at the release today (Thursday, 24 January 2002) of the company’s results for the quarter ended 31 December 2001. 081-jmd

Embargo: Not for release before 12:00 midday (SA time) on Thursday, 24 January 2002

Focus expands to include exploration, growth

  • Gold production up 3%
  • Cash costs: US$186 per ounce (R60 617 per kilogram)
  • Cash operating profit up 69% (109% in rand terms)
  • Headline earnings double (170% in rand terms)
  • Long hedge positions eliminated, as promised
  • 17% return on shareholders’ equity (excluding deferred tax) for the quarter alone
  • Exploration and growth projects started
  • Western Areas advance settled – balance sheet stronger

Durban Roodepoort Deep, Limited (DRD) reported “creditable” improvements in performance in the second quarter of the financial year compared with the previous quarter, said Chairman and CEO Mark Wellesley-Wood at the release today (Thursday, 24 January 2002) of the company’s results for the quarter ended 31 December 2001.

Hedge restructuring remained the company’s most important objective, and it was envisaged DRD would be an unhedged gold producer, he said. During the quarter under review, DRD had eliminated the balance of its long gold hedge positions and had implemented a buy back of forward gold sales.

In view of the higher rand gold price and the company’s improved cash flow, a number of projects designed to increase gold production from old areas were under way, Wellesley-Wood said. The consequent reduction in pay limits should increase reserves, and therefore mine lives, significantly.

Continued improvement in operating performance in the December quarter, together with the settlement of the Western Areas advance and disposal of the associated share parcel, had resulted in a much stronger balance sheet with a debt:equity ratio of 15%, he said.

Gold production for the quarter under review was 3% higher at 269 096 ounces (8 369 kilograms), while cash operating costs were lower in unit cost terms at US$186 per ounce (R60 617 per kilogram).

A 2% improvement in the dollar gold price, together with a 22% decline in the rand against the dollar, resulted in profit before taxation doubling to US$7.8 million (by 152% in rand terms to R83.6 million).

The quarter saw a significant increase in net cash operating profit both in dollar and rand terms to US$12.7 million (R135.4 million) from US$6.5 million (R55.1 million) in the previous quarter.

Headline earnings rose by 118% to US$5.9 million (170% in rand terms to R62.4 million).

The return on shareholder’s equity (excluding deferred tax) for the quarter alone was 17%.

Blyvooruitzicht

Blyvooruitzicht had another good quarter. Production, at 64 847 ounces (2 017 kilograms), was similar to that of the previous quarter. Cash unit costs were 17% lower at US$172 per ounce (R55 881 per kilogram).

The expansion programme is on track to increase underground production by an additional 5 000 ounces (156 kilograms) a month by 2004, an improvement of 23%.

North West Operations

At the North West Operations, gold output was 2% higher, mainly as a result of increased tonnage. Cash unit costs were 19% lower at US$189 per ounce (R61 362 per kilogram).

The Medium Grade Project at Harties No 6 shaft has got under way. Some 6 million tons of ore below 69 level, at an average grade of 8 grams per ton, are to be mined.

Exploration of reefs outcropping on surface is continuing, with initial results indicating the possibility of an open-pit resource in addition to the Black Reef currently being mined.

Tolukuma

Tolukuma was unable to sustain the previous quarter’s performance. Production was down 7%, mainly as a result of lower underground yield, due in turn to increased development. Cash costs were slightly higher at US$192 per ounce (R63 016 per kilogram).

Plans to expand Tolukuma, taking production from the current 70 000 ounces a year to 115 000 ounces next year are being implemented. The Kunda vein suggests potential for a small monthly tonnage, mined by open pit. Further shallow drilling is planned.

The Miliahamba project, which contains the Kunda vein, will be accessed from underground and development on the twin haulage has started. At the Saki project, a total of 93 trenches have been excavated, mapped and sampled to date.

Crown

Production at Crown was better in the second quarter. Improvements in both tonnage and grade resulted in a 13% increase in gold production. Cash unit costs were 23% lower at US$198 per ounce (R64 307 per kilogram).

Queries:

James Duncan
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Janice Dempsey
+27 11 880 3924 (o)
+27 82 376 2327 (m)

Charmane Russell
+27 11 880 3924 (o)
+27 82 372 5816 (m)

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