DRDGOLD expects to remain within guidance’s lower end range
Johannesburg – DRDGOLD is in the process of finalising its results for the six months ended 31 December 2023. Group revenue increased by R319.9 million, or 12%, to R2,974.2 million (2022: R2,654.3 million).
Ergo Mining Proprietary Limited’s (“Ergo”) revenue increased by R234.5 million to R2,193.0 million (2022: R1,958.5 million), mainly due to a 22% increase in the Rand gold price received. Gold sold decreased by 8% from 2,040kg in 2022 to 1,872kg as a result of a decrease in throughput tonnages from 9.8Mt in 2022 to 8.1Mt, due to ongoing delays in the regulatory approval for 4L3 and community interference in respect of 5L27, and Ergo having to rely on legacy and clean-up sites to make up tonnes. The impact of the decrease in throughput tonnage was offset by a 15% increase in yield to 0.233g/t from 0.203g/t in 2022.
The water usage license for 4L3 was received on 18 January 2024, while the construction of the pipe-column to 5L27 was completed late January 2024.
Far West Gold Recoveries Proprietary Limited’s (“FWGR”) revenue increased by R85.4 million to R781.2 million (2022: R695.8 million). The 22% increase in the Rand gold price received was offset by an 8% decrease in gold sold to 663kg (2022: 722kg). The decrease in gold sold was as a result of a lower head grade from the new Driefontein 3 site than that of the depleted Driefontein 5 site, resulting in a 12% decrease in yield from 0.245g/t in 2022 to 0.215g/t.
The impact of the increase in revenue on earnings and headline earnings was moderated by an increase in Group cash operating costs of R257.5 million, or 14%, to R2,097.1 million (2022: R1,839.5 million).
Cash expenditure on capital projects increased by R687.4 million, or 177%, to R1,074.7 million (2022: R387.3 million). The significant increase was due to the establishment of the solar power plant at Ergo which is scheduled for substantial completion in March 2024, with battery storage facilities scheduled to be completed by October 2024.
Production and cash operating cost per unit guidance
The Company issued production guidance for the year ended 30 June 2024 of between 165,000 ounces and 175,000 ounces. With the new reclamation sites now in operation at Ergo, DRDGOLD expects to remain within range, albeit to the lower end. Although DRDGOLD expect the cost pressures experienced in the first half of the financial year to ease going forward, the Group has increased its cash operating unit cost guidance from R770,000/kg to R800,000/kg.
