DRDGold expects 13pc growth

HARARE - South-Africa-based miner DRDGold Limited (DRDGold), with operations in Zimbabwe, expects a 13 percent increase in gold production in the quarter ended June 2014.

In a trading update released this week, the group said cash operating costs are expected to be down by about six percent while cash and cash equivalents have surged from $19,3 million to about $19,7 million.

Its chief executive, Niël Pretorius, said following the suspension of the flotation and fine grind (FFG) circuit in April, it was important that the company stabilises Ergo’s carbon in leach circuit.

“This circuit is now delivering into call, and we are well positioned to start a three-month test programme of the FFG in September 2014, after Eskom’s winter tariffs come to an end,” he said.

DRDGold’s exploration project in Zimbabwe’s greenstone gold mining belt with joint venture partner Chizim Investments is currently progressing rapidly.

This comes after the revenue and output of the JSE-listed gold recovery company DRDGold fell in the three months to March 31, when all-in sustaining costs rose 24 percent.

Earnings before interest, taxes, depreciation and amortisation were down from R46,3 million to R16 million, and a headline loss of 7 cents a share was recorded compared with 0 cents a share in the previous quarter.

Gold produced and sold quarter-on-quarter was 14 percent lower at 30 126 ounces.

“We remain firmly of the view that the difficult part of the project is behind us,” said Pretorius of the problems the company has been experiencing at its East Rand gold-from-slime recovery flotation plant.

DRDGold poured the first gold from the new flotation/fine grind circuit (FFG) and the high-grade, carbon-in-pulp section in January.
Pretorius said that while both components of the FFG, the flotation plant and the ultra-fine-grind mills, performed satisfactorily from the outset gold recovery was much lower than planned in the new high-grade section.

In the established low-grade section, which treats both the float and high grade-tail, recoveries also dropped off significantly.

“Although we managed to free up more previously inert gold through the FFG and achieved a drop in washed residue grades that was in line with project design, gold remained in solution, dissolved losses surged and gold production dropped to a low in the month of March,” he added.

While throughput was only marginally lower at 5 823 000 t (5 856 000 t), the average yield was 13 percent down at 0,161 g/t.

Lower gold production led to a 25 percent increase in cash operating unit costs to R413 562/kg and all-in sustaining costs rose to R463 823/kg.

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