DRDGOLD increases operating profit by 320%
The DRDGOLD’s total gold production increased by 9% to 5,424kg, reflecting an 8% increase in total throughput to 26.3Mt and a 5% increase in average yield from 0.197g/t to 0.206g/t as FWGR achieved stable production and made its first full 12-month contribution to the Group’s results.
Gold production at Ergo decreased by 11% from 4,493kg to 3,989kg mainly due to Ergo’s volume throughput which decreased by 13% from 23.2Mt to 20.2Mt, a consequence of the COVID-19 lockdown, subsequent cautious ramp-up and interruptions in power supply from Eskom and the City of Ekurhuleni.
The impact of this decrease was moderated by a 2% increase in average yield from 0.194g/t to 0.197g/t, despite the Knights plant reaching the end of its current higher-grade mineable reserves.
FWGR produced 1,435kg of gold, with 6.1Mt ore milled at an average yield of 0.237g/t. DRDGOLD’s cash operating unit costs decreased by 3% from R499,749/kg to R482,417/kg, reflecting FWGR’s substantially lower cash operating unit costs of R243,542/kg.
Ergo’s cash operating unit costs rose by 11% from R512,439/kg to R568,476/kg due to lower production resulting mainly from the stoppages in operations in response to the COVID-19 pandemic.
DRDGOLD all-in sustaining costs (“AISC”) were 3% higher at R541,475/kg, those of Ergo 18% higher at R614,861/kg and those of FWGR 34% lower at R299,792/kg. The Group’s AISC margin was 29.7% compared to 9.1% in the comparative period.
FINANCIAL REVIEW
DRDGOLD revenue increased by 52% to R4,185.0 million due to higher gold production and gold sold, together with a 33% increase in the average Rand gold price received to R768,675/kg. Group operating profit increased by 320% from R371.8 million to R1,562.1 million, after accounting for cash operating costs, 8% higher at R2,626.0 million.
The operating margin of the Group was 37.3%, compared to 13.5% in the comparative period. Headline earnings of R634.5 million (82.4 SA cents per share) were reported compared with headline earnings of R72.7 million (10.9 SA cents per share) in the comparative period.
The Group ended the financial year with cash and cash equivalents of R1,715.1 million and the Company remains free of bank debt as at 30 June 2020.
SUSTAINABLE DEVELOPMENT
In 2020, women in mining increased from 21% to 23% of total staff. Women in core positions increased from 13% to 14% and women in management from 18% to 19% of total staff in these positions.
Some 1,245 individual training courses took place at a total cost to company of R11.5 million, compared with 1,633 at a total cost to company of R8.5 million in 2019. Social capital-related spend was R20.4 million compared with R16.6 million in 2019. This includes the spend on COVID-19 related community relief.
The DRDGOLD’s total spend on environmental rehabilitation increased from R44.1 million to R54.4 million – R52.4 million at Ergo and R2.0 million at FWGR. This included rehabilitation of 45.5 ha on the Brakpan Tailings Storage Facility and 20 ha on the Crown Complex.
There were eight dust exceedances from 1,552 samples, representing 0.52% of the total number of measurements. This compares with the 1,201 samples and eight exceedances in the previous year, representing 0.67% of the total number of measurements.
In FY2021, DRDGOLD anticipates Group production of between 165,000 and 185,000 ounces of gold at a cash operating cost of approximately R535,000/kg, said Niël Pretorius, DRDGOLD Chief Executive Officer.
