SA miner completes Zim exploration

HARARE - South Africa (SA)’s fourth largest gold miner DRDGold Limited (DRDGold) says it has completed exploration in Zimbabwe and will soon commence surface mining.

Niël Pretorius, DRDGold chief executive, said the miner only identified underground mining opportunities after finishing the exercise in five areas in the country and is instead focusing on surface excavation.

“Underground mining is not in line with DRDGold’s strategy, so these prospects will be packaged for disposal. We are currently finalising a feasibility study on the reclamation of gold tailings,” Pretorius said.

DRDGold — which has spent around $3 million to date on drilling an exploration target near Gweru and compiling geochemical reports on the Leny, Ascot and John Bull prospects near Norton, 40 km west of Harare — is in a 50 percent joint venture with a Zimbabwean firm.

Pretorius, who has spent the last seven years transforming DRDGold into a tailings treatment company, indicated that the company also intends to dispose its underground mining assets in SA.

“Various expressions of interest have been received and these are being assessed, our objective being to secure the best deals that maximise value for shareholders,” said Pretorius.

He noted that the Johannesburg Stock Exchange-listed company, which has 25 000 hectares of exploration tenement in Zimbabwe, is in the process of investigating viability of tailings dumps.

Previously the recycling of tailings dumps had been difficult because of the nature of the waste, but Pretorius said the company’s “fine grind” technology could do this perhaps.

“We would look at Zimbabwean dumps only after we have seen what the ‘fine grind’ technology opens up for us,” he said.

Last week, DRDGold reported a 16 percent increase in revenue to R531-million in the quarter ended March 31, 2013, which drove a 17 percent jump in headline earnings per share to R0,14 for the period.

The improved revenue was on the back of a three percent year-on-year increase in gold production to 35 976 ounces, as well as a higher average gold price of R474 482/kg received for the quarter.

After accounting for net operating costs of R360,3 million, operating profit was five percent higher at R170,7-million, notwithstanding a three percent increase in cash operating unit costs to $1 111/ounces owing to increased volumes and yearly price increases.

The good performance was further bolstered by steady volume delivery to the plants, which saw a three percent year-on-year increase in throughput to about 5,77 million tonnes for the March quarter. - John Kachembere


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