DRDGOLD: Quarterly operating update by 31 March 2020

COVID-19 production impacts offset by higher gold price, selling down of inventory

In an operating update for the quarter ended 31 March 2020 released today, has reported an 18% quarter on quarter increase in adjusted EBITDA to R389.3 million, reflecting a 13% increase in the average Rand gold price received to R785 581/kg.

The company’s Ergo and Far West Gold Recoveries operations were temporarily halted towards the end of the March quarter due to the national lockdown.

While throughput was 4% down at 6 560 000t and yield 9% down at 0.205g/t, resulting in a 13% decline in gold production to 1 346kg, gold sales were just 3% lower at 1 462kg due to the company selling down inventory in anticipation of the lockdown.

Although the cash operating cost per kg sold rose by 6% to R489 193, the cash operating cost per ton milled was stable at R101.

All-in sustaining cost and all-in cost were both higher at R577 633/kg and R588 235/kg due mainly to an increase in capital expenditure.

Cash and cash equivalents increased by R1 291.0 million to R1 834.4 million, reflecting free cashflow from operations of R422.8 million and proceeds of R1 085.6 million from Sibanye-Stillwater’s share subscription.

An interim dividend to shareholders totalling R213.6 million was paid during the quarter.

External borrowings remained at zero.

While production guidance initially provided for the year to 30 June 2020 was between 175 000 and 190 000oz, and the company subsequently advised that it was tracking the higher end of this, due to the impact of COVID-19 on the business to date and continuing uncertainty surrounding the pandemic, it is now expected that production will track the lower end.
The information contained in this release does not constitute an earnings forecast. The financial information provided is the responsibility of the directors of DRDGOLD; it has not been reviewed or reported on by the company’s auditors.

Note to editors: the full operating update is available on SENS and DRDGOLD’s website, www.drdgold.com

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James Duncan
R&A Strategic Communications
+27 (0) 11 880 3924 (office)
+27 (0) 79 336 4010 (mobile)
james@rasc.co.za