Media releases

Operating update for the quarter ended 31 December 2018 and trading statement for the six months ended 31 December 2018

1. Operating Update

The operating update of the Company for the quarter ended 31 December 2018 is as follows:

31 Dec 201830 Sept 2018% change
Gold produced kg1,1111,169-5%
oz 35,73235,572 -5%
Gold sold kg 1,1371,118 2%
oz 36,55635,944 2%
Ore Milled Metric (000't) 5,7556,249 -8%
Yield Metric (g/t) 0.1930.187 3%
Price and costs
Average gold price received R per kg 564,218545,867 3%
US per oz 1,2271,208 2%
Adjusted EBITDA* Rm 29.212.9 126%
US$m 2.00.9 127%
Cash operating costs R/t 10194 8%
US/t 77 6%
Cash operating costs R per kg 510,245509,979 0%
US per oz 1,1101,129 -2%
All-in sustaining costs ** R per kg 560,215541,541 4%
US per oz 1,2191,199 2%
All-in cost ** R per kg 732,394658,180 11%
US per oz 1,5931,457 9%
Capital expenditure
Sustaining Rm 9.83.8 158%
US$m 0.70.3 128%
Non-sustaining/growth Rm 188.4117.6 60%
US$m 13.28.4 57%
Average R/US$ exchange rate 14.3014.05 2%

Operating update for the quarter ended 31 December 20

Rounding of figures may result in computational discrepancies

* The adjusted earnings before interest, taxes, depreciation and amortisation ("EBITDA") is based on the definitions in DRDGOLD´s revolving credit facility agreements. Adjusted EBITDA is not an IFRS measure and is provided for illustrative purposes only and because of its nature, it may not fairly present the Company´s results of operations.

** All-in cost definitions based on the guidance note on non-GAAP Metrics issued by the World Gold Council on 27 June 2013.

Gold production quarter on quarter was down 5% primarily as a consequence of an 8% drop in tonnage throughput. Ergo Mining Proprietary Limited’s lower throughput was mainly as a result of major power interruptions experienced over 11 days during the second quarter, caused by a fire at an Eskom sub-station, a lightning strike on the Brakpan tailings complex transformer yard and load-shedding by the Johannesburg Metropolitan Municipality. Overall yield showed an improvement quarter on quarter of 3%.

The increase in gold price received and gold sold contributed to an increase in adjusted EBITDA for the quarter.

The 8% increase in cash operating unit costs per ton was mainly as a result of the 8% decrease in overall throughput. Cash operating costs per kilogram were stable quarter on quarter, offset by the increase in gold sold.

All-in sustaining cost and all-in costs per kilogram include both growth and sustaining capital expenditure, as well as production costs associated with the initial commissioning of our new Far West Gold Recoveries (“FWGR”) project. Construction of this began in August 2018 and early-stage commissioning on 6 December 2018. FWGR is off to a flying start and we look forward to the benefit of its contribution in the second half of the 2019 financial year.

2. Trading Statement

In terms of paragraph 3.4(b) of the JSE Limited Listings Requirements, companies are required to publish a trading statement as soon as they are satisfied, with a reasonable degree of certainty, that the financial results for the current reporting period will differ by at least 20% from the financial results of the previous corresponding period.

DRDGOLD is in the process of finalising its results for the six months ended 31 December 2018 (“Results”) and shareholders are accordingly advised that the Company has reasonable certainty that it will report a:

  • loss per share of between 5.8 cents and 8.6 cents per share compared to earnings of 14.4 cents per share for the previous corresponding period; and
  • headline loss per share of between 5.8 cents 8.6 cents per share compared to headline earnings of 14.3 cents per share for the previous corresponding period.

The expected decrease in earnings per share and headline earnings per share for the six months ended 31 December 2018 compared to the previous corresponding period are primarily due to the costs associated with the commissioning and start of FWGR, as well as a 3% decrease in gold produced.

The information contained in this announcement does not constitute an earnings forecast. The financial information provided is the responsibility of the directors of DRDGOLD, and such information has not been reviewed or reported on by the Company’s auditors. The Company’s Results are expected to be published on SENS on or about 13 February 2019.

1 February 2019

One Capital

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