DRDGold warns of lower interim earnings

3rd February 2022

By: Tasneem Bulbulia

Senior Contributing Editor Online


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Aim-listed DRDGold expects to report earnings per share (EPS) and headline earnings per share (HEPS) of between 52.5c and 63.6c for the six months ended December 31, which represents a decrease of 43% to 53% from the EPS and HEPS of 111c reported for the six months ended December 31, 2020.

A number of items contributed to the lower EPS and HEPS, including a 16% year-on-year decrease in revenue to R2.50-billion.

Ergo Mining’s revenue decreased by 20% year-on-year to R1.8-billion, owing mainly to a 13% decrease in the rand gold price received, as well as a 9% decrease in gold sold to 2 090 kg.

Volume throughput increased by 1%.

Yield decreased by 9% to 0.184 g/t as a result of the bulk of the higher-grade reserves in the Knights area reaching the end of its life-of-mine.

Far West Gold Recoveries’ (FWGR’s) revenue decreased by 2% to R693.8-million, despite a 13% increase in gold sold to 801 kg, owing to a 13% decrease in the rand gold price received.

Volume throughput remained stable.

Yield increased by 11% to 0.257 g/t owing to higher-grade material being reclaimed from Driefontein 5 and improved gold bullion purities resulting from the implementation of the copper elution circuit.

Meanwhile, cash operating costs increased by 11% year-on-year to R1.68-billion.

At Ergo, cash operating costs increased by 12% to R1.47-billion, owing to the 1% increase in volume throughput, an increase in the use of reagents as a result of the increase in volume throughput together with a change in the minerology of new mining sites, and above consumer price index increases in steel and reagents.

At FWGR, cash operating costs increased by 3% to R208.4-million.

As at December 31, DRDGold’s cash and cash equivalents was R2.24-billion, with a revolving credit facility with Absa Bank of R200-million available, if needed.

During the interim period, DRDGold generated free cash flow of R406.9-million and paid cash dividends of R345.5-million.

The group remains free of any bank debt at period end.

DRDGold expects to publish its results for the period on or about February 16.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online



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