6-K 1 drd_report.htm
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 6-K
REPORT OF A FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For February 2009
Commission File Number 0-28800
______________________
DRDGOLD Limited
EBSCO House 4
299 Pendoring Avenue
Blackheath
Randburg, South Africa, 2195
(Address of principal executive offices)
______________________
Indicate by check mark whether the registrant files or will file annual reports under cover of Form
20-F or Form 40-F.
Form 20-F Form 40-F
Indicate by check mark whether the registrant by furnishing the information contained in this Form
is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.
Yes No
If ''Yes'' is marked, indicate below the file number assigned to the registrant in connection with Rule
12g3-2(b): N/A
Attached to the Registrant Form 6-K filing for the month of February 2009, incorporated
by reference herein:
Exhibit
99.1 Release dated February 6, 2009, entitled “INTERIM REPORT TO SHAREHOLDERS FOR
THE QUARTER AND SIX MONTHS ENDED 31 DECEMBER 2008”.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
DRDGOLD LIMITED
Date: February 6, 2009
By: /s/ Themba Gwebu
Name: Themba Gwebu
Title: Company Secretary
KEY FEATURES
• 65% increase in operating profit
• 30% rise in headline earnings per share
• 2% drop in cash operating costs
• Acquisition of remaining 35% in Elsburg JV (Ergo Phase 1)
• ERPM underground operations suspended
REVIEW OF OPERATIONS
Quarter
Quarter
%
Quarter 6 months to
6 months to
6 months to
Group
Dec 2008
Sep 2008
Change
Dec 2007 31 Dec 2008
30 Jun 2008 31 Dec 2007
Gold production
Continuing operations
oz
60 057
70 861
(15)
77 259
130 918
141 589
166 416
kg
1 868
2 204
(15)
2 403
4 072
4 404
5 176
Discontinued operations
oz
–
–
–
3 394
–
–
13 427
kg
–
–
–
106
–
–
417
Group
oz
60 057
70 861
(15)
80 653
130 918
141 589
179 843
kg
1 868
2 204
(15)
2 509
4 072
4 404
5 593
Cash operating costs
Continuing operations
US$ per oz
654
755 13
703
709
678 639
ZAR per kg
217 839
188 967
(15)
153 690
202 212
167 950
142 966
Discontinued operations US$ per oz
–
–
–
1 336
–
–
1 098
ZAR per kg
–
–
–
281 613
–
–
245 885
Group
US$ per oz
654
755 13
730
709
678 673
ZAR per kg
217 839
188 967
(15)
159 094
202 212
167 950
150 639
Gold price received
US$ per oz
769
864 (11)
797
821
918 739
ZAR per kg
255 213
216 297
18
173 606
234 150
225 696
165 254
Capital expenditure
US$ million
9.2
9.1 (1)
6.7
18.3
24.7 11.8
ZAR million
91.8
70.2 (31)
45.3
162.0
185.4 81.8
INTERIM REPORT TO SHAREHOLDERS
FOR THE QUARTER AND SIX MONTHS ENDED
31 December 2008
(Incorporated in the Republic of South Africa)
Registration No. 1895/000926/06
JSE share code: DRD • ISIN: ZAE 000058723
Issuer code: DUSM • NASDAQ trading symbol: DROO
(“DRDGOLD” or “the company”)
GROUP RESULTS
• SHAREHOLDER REPORT 2008 •
DRDGOLD LIMITED
2
Issued capital
376 673 613 ordinary no par value shares
5 000 000 cumulative preference shares
Total ordinary no par value shares issued and committed: 395 709 532
Stock traded
JSE
NASDAQ
Average volume for the quarter per day ('000)
1 185
1 700
% of issued stock traded (annualised)
82
118
Price • High
R6.00
$0.595
• Low
R2.86
$0.285
• Close
R5.50
$0.557
FORWARD LOOKING STATEMENTS
Many factors could cause the actual results, performance or
achievements to be materially different from any future results,
performance or achievements that may be expressed or implied by such
forward-looking statements, including, among others, adverse changes or
uncertainties in general economic conditions in the markets we serve, a
drop in the gold price, a continuing strengthening of the Rand against the
Dollar, regulatory developments adverse to DRDGOLD or difficulties in
maintaining necessary licences or other governmental approvals,
changes in DRDGOLD's competitive position, changes in business
strategy, any major disruption in production at key facilities or adverse
changes in foreign exchange rates and various other factors.
These risks include, without limitation, those described in the section
entitled "Risk Factors" included in our annual report for the fiscal year
ended 30 June 2008, which we filed with the United States Securities and
Exchange Commission on 12 December 2008 on Form 20-F.You should
not place undue reliance on these forward-looking statements, which
speak only as of the date thereof. We do not undertake any obligation
to publicly update or revise these forward-looking statements to reflect
events or circumstances after the date of this report or to the
occurrence of unanticipated events.
OVERVIEW
Dear shareholder
Safety, health and environment
I report with deep regret the death of one employee in a work-related
incident during the quarter under review. Annanias Timbe died from
injuries sustained when he fell into the measuring flask of a loading box
underground at the No 6 Shaft of Blyvooruitzicht Gold Mining Company
Limited (“Blyvoor”) on 10 October 2008.
Notwithstanding this sad event, Blyvoor's performance in respect of all
of the key safety indicators (per million man hours) showed
improvement in the quarter: the Dressing Station Injury Frequency Rate
(“DSIFR”) improved from 35.33 to 28.64, the Disabling Injury Frequency
Rate (“DIFR”) from 10.71 to 9.73, the Reportable Injury Frequency Rate
(“RIFR”) from 5.09 to 4.05, and the Fatal Injury Frequency Rate (“FIFR”)
from 0.54 to 0.27.
During the quarter, Blyvoor spent R6.7 million on the purchase of
additional self-contained self-rescuers and R0.6 million on the expansion
of its underground seismic monitoring networks.
As one would expect, East Rand Proprietary Mines Limited (“ERPM”) –
the underground operations of which were suspended at the end of
October 2008 – showed substantial improvement in respect of all of the
key safety indicators.
Crown Gold Recoveries (Pty) Limited (“Crown”) recorded
deterioration only in respect of its RIFR: from 2.28 to 2.84.
The behaviour-based safety initiative reported on in previous quarters
was taken forward during the quarter under review. A pilot behaviour-
based safety programme is scheduled to be implemented at Blyvoor's
No 6 Shaft during March 2009 and then rolled out to the rest of
DRDGOLD's operations.
With respect to health matters, we continued to make progress in the
areas of occupational hygiene, noise abatement and radiation protection.
Total expenditure on environmental issues during the quarter was some
R7.2 million: R2.4 million at Blyvoor, the largest portion of which
(R1.3 million) was for slimes clean-up; R0.8 million at ERPM, most of
which (R0.6 million) was directed to the rehabilitation trust fund; and
R4.0 million at Crown, most of which was spent on site rehabilitation.
Production
Total gold production was 15% lower for the quarter under review at
60 057 oz, reflecting declines in production at ERPM (a consequence of
the discontinuation of underground mining) and at Crown. At the latter,
this was as a result both of continued overall throughput reduction in
order to manage diminishing tailings deposition capacity and later than
planned commissioning of the Top Star reclamation site. Blyvoor,
however, reported a 4% increase in production, due mainly to an
increase in surface yield.
Financial
Total revenue for the quarter was unchanged at R476.8 million and after
accounting for cash operating costs, which were 2.0% lower at
R406.9 million, and gold in process of R24.4 million, operating profit was
65% higher at R94.3 million.
After deduction of depreciation of R17.1 million, provision for
environmental rehabilitation of R9.0 million, and retrenchment costs of
R34.4 million, gross profit from operating activities was R33.8 million.
Adjustments for financial liabilities measured at amortised cost, of
R39.8 million, profit on the sale of assets and investments of
R10.2 million and finance income of R25.7 million took profit before tax
to R63.0 million.
Taxation totalled R29.6 million, leaving a net profit of R33.4 million
compared with the previous quarter's R8.8 million net loss.
Corporate
As a consequence of the decision taken during the previous quarter to
suspend the underground operations of ERPM, we embarked on a 60-
day consultation process in terms of Section 189A of the Labour
Relations Act. This process affected 1 700 employees and their
representatives. We concluded consultations during January 2009 and
proceeded to retrench some 1 300 employees. Approximately
109 employees took voluntary retrenchment packages, and 251 took
transfers to other DRDGOLD operations or were retained to provide
interim maintenance services at ERPM. We have received several offers
for ERPM’s underground operations and have decided not to accept any
of them.
During the quarter, we announced that we had reached agreement with
the Mintails group to acquire the remaining 35% of the Elsburg Gold
Mining Joint Venture (“Elsburg JV”), the gold component of Ergo Mining
(Pty) Limited (“Ergo JV”). Conclusion of this acquisition will result in us
owning 100% of the Elsburg JV.
We are very pleased with the progress achieved on Phase 1 of the
Ergo JV. Commissioning of the first carbon in leach circuit at the
Brakpan plant began on schedule during the December quarter and
• SHAREHOLDER REPORT 2008 •
DRDGOLD LIMITED
3
the project is thus well placed to achieve the 600 000 tpm throughput
planned by April 2009. None of our key operating assumptions has to
date proven flawed.
A very pleasing adjunct to the Ergo project is the creation – in
conjunction with the Ekurhuleni Municipality – of the Ekurhuleni
Business Development Academy (“EDBA”). With the Ergo Training
Centre as a foundation, a fully accredited, self-sustaining learning
institution is being created which will be of benefit to people from the
surrounding communities and beyond. The intention is to provide
training in the fields of engineering, metallurgy, mining and business
support services. Good progress has been made on refurbishment of
the premises and the first training modules are expected to begin during
February 2009.
Changes to the board
With effect from 1 January 2009, I assumed the role of Chief Executive
Officer (“CEO”) of DRDGOLD, succeeding John Sayers who retired
from the board with effect from 31 December 2008.
The board is grateful to John for the contribution he made during a very
challenging period. His strategy of stabilisation and focus transformed
the company into the profitable, South African gold miner that it is today.
He was instrumental in the divestment of our Australasian assets which,
along with the restructuring of our South African assets, has put the
company in excellent financial health. He will continue in a consultancy
role, with special focus on growth, so that the company can continue to
benefit from his expertise and experience.
Professor Douglas Blackmur’s appointment to the board of directors
ceased on 28 November 2008, after a resolution relating to his
re-election was withdrawn at the annual general meeting.
Looking ahead
There appears to be even less certainty as to when the global economic
crisis will start to subside. In fact, fears of inflation and currency volatility
seem to be on the increase. These uncertain times may continue to
provide the “safe haven” attraction of gold, and support the gold price
at its current high levels.
Our Ergo surface retreatment project is coming to fruition now and
should therefore benefit from the higher gold price.We are also pleased
that the Top Star Project is finally up and running, to take advantage of
the current gold price trend.
With the global liquidity squeeze, we will remain cautious of long lead
capital projects, and avoid projects that we cannot fully cover with the
cash and facilities we have at hand. Our focus will therefore remain on
increasing efficiencies, managing risks, controlling costs carefully, and
taking a very disciplined approach to growth.
Niel Pretorius
Chief Executive Officer
6 February 2009
• SHAREHOLDER REPORT 2008 •
DRDGOLD LIMITED
4
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Quarter
Quarter
Quarter 6 months to
6 months to
6 months to
Dec 2008
Sep 2008
Dec 2007 31 Dec 2008
30 Jun 2008
31 Dec 2007
Rm
Rm
Rm
Rm
Rm
Rm
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Continuing operations
Gold and silver revenue
476.8
476.7 416.9 953.5
994.0 849.9
Net operating costs
(382.5)
(419.5)
(368.0)
(802.0)
(725.0)
(739.3)
Cash operating costs
(406.9)
(416.5)
(369.3)
(823.4)
(739.6)
(740.0)
Movement in gold in process
24.4
(3.0)
1.3
21.4
14.6 0.7
Operating profit
94.3
57.2 48.9
151.5
269.0 110.6
Depreciation
(17.1)
(17.0)
(19.9)
(34.1)
(29.4)
(39.6)
Movement in provision for environmental
rehabilitation
(9.0)
(12.1)
(4.8)
(21.1)
(20.7)
(9.5)
Retrenchment costs
(34.4)
(0.9)
(5.1)
(35.3)
(5.1)
(6.2)
Gross profit from operating activities
33.8
27.2 19.1 61.0
213.8 55.3
Impairments
(4.8)
(47.6)
–
(52.4)
(63.9)
–
Administration expenses and general costs
(32.4)
(6.1)
(17.7)
(38.5)
(40.4)
(40.5)
Share-based payments
(3.1)
(1.1)
(0.9)
(4.2)
(6.2)
(0.4)
Care and maintenance costs
(3.1)
(2.8)
(2.8)
(5.9)
(9.9)
(5.3)
Financial liabilities measured at amortised cost
39.8
7.3 (0.8)
47.1
(88.5)
(0.8)
Profit/(loss) on sale of assets and investments
10.2
(1.6)
–
8.6
(0.9)
12.0
Finance income
25.7
32.9 15.4 58.6
62.6 13.1
Finance expenses and unwinding of provisions
(3.1)
(2.7)
(4.8)
(5.8)
(0.7)
(13.2)
Profit before taxation
63.0
5.5 7.5
68.5
65.9 20.2
Income tax
(8.6)
(15.6)
(3.5)
(24.2)
(9.8)
(3.5)
Deferred tax
(21.0)
1.3 –
(19.7)
81.6 –
Profit/(loss) after taxation
33.4
(8.8)
4.0
24.6
137.7 16.7
Discontinued operations
Profit/(loss) for the period from discontinued
operations
–
–
6.6
–
(1.8)
(50.0)
Profit on sale of assets and investments
–
–
118.3
–
42.9 1
126.3
Impairment from discontinued operations
–
–
(44.4)
–
(2.3)
(44.4)
Net profit/(loss) for the period
33.4
(8.8)
84.5
24.6
176.5 1
048.6
Attributable to:
Ordinary shareholders of the company
54.7
3.1 93.2 57.8
144.6 850.3
Minority interest
(21.3)
(11.9)
(8.7)
(33.2)
31.9 198.3
33.4
(8.8)
84.5
24.6
176.5 1 048.6
Other comprehensive income
Foreign exchange translation
7.8
(19.5)
(54.9)
(11.7)
20.9 62.7
Mark-to-market of available-for-sale investments
–
–
–
–
1.7 –
Total comprehensive income/(loss) for
the period
41.2
(28.3)
29.6
12.9
199.1 1 111.3
Attributable to:
Ordinary shareholders of the company
62.5
(16.4)
38.3
46.1
167.2 913.0
Minority interest
(21.3)
(11.9)
(8.7)
(33.2)
31.9 198.3
41.2
(28.3)
29.6
12.9
199.1 1 111.3
Reconciliation of headline profit/(loss)
Net profit
54.7
3.1 93.2 57.8
144.6 850.3
Adjusted for:
– Impairments
4.8
47.6 –
52.4
63.9 –
– Impairment from discontinued operation
–
–
44.4
–
2.3 44.4
– Profit on sale of discontinued operations
–
–
(118.3)
–
(42.9)
(1 126.3)
– (Profit)/loss on sale of assets and investments
(9.8)
1.2 –
(8.6)
(9.2)
(12.0)
– Minority share of headline earnings adjustment
1.4
(12.4)
(10.1)
(11.0)
(5.1)
208.9
Headline profit/(loss)
51.1
39.5 9.2
90.6
153.6 (34.7)
Headline profit/(loss) per share – cents
13.6
10.5 2.4
24.1
40.8 (9.2)
Basic profit per share – cents
14.5
0.8 24.8 15.3
38.4 226.3
Diluted headline profit/(loss) per share – cents
13.6
10.5 2.4
24.1
40.8 (9.2)
Diluted basic profit per share – cents
14.5
0.8 24.8 15.3
38.4 226.3
Calculated on the weighted average
ordinary shares issued of:
376 598 733
376 573 381
376 141 981 376 586 057
376 261 700
375 669 155
The condensed consolidated financial statements below have been prepared in accordance with International Financial
Reporting Standards (“IFRS”) and IAS 34, which is consistent with the accounting policies used in the audited annual
financial statements for the year ended 30 June 2008.
• SHAREHOLDER REPORT 2008 •
DRDGOLD LIMITED
5
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at
As at
As at
As at
31 Dec 2008
30 Sep 2008
30 Jun 2008
31 Dec 2007
Rm
Rm
Rm
Rm
Unaudited
Unaudited
Audited
Unaudited
Assets
Property, plant and equipment
891.2
821.2 815.6 652.3
Non-current Investments and other assets
64.8
65.3 65.3 57.7
Environmental rehabilitation trust funds
120.7
116.0 110.8 82.8
Deferred tax
61.8
82.8 81.6
–
Current assets
944.9
1 036.6
1 189.2
956.6
Inventories
97.4
67.4 62.9 69.2
Trade and other receivables
223.5
145.2 240.5 123.2
Cash and cash equivalents
609.0
809.0 846.1 749.2
Assets classified as held for sale
15.0
15.0 39.7 15.0
Total assets
2 083.4
2 121.9
2 262.5
1 749.4
Equity and liabilities
Equity
1 285.4
1 240.7
1 305.5
1 130.2
Shareholders' equity
1 257.4
1 191.4
1 244.3
1 083.5
Minority shareholders' interest
28.0
49.3 61.2 46.7
Long-term liabilities
93.8
120.8 125.7 49.2
Post-retirement and other employee benefits
24.1
23.4 22.7 21.5
Provision for environmental rehabilitation
405.7
394.9 381.3 288.3
Current liabilities
274.4
342.1 427.3 260.2
Trade and other payables
262.2
270.3 387.4 260.2
Short-term liabilities
12.2
34.2 39.9
–
Liabilities classified as held for sale
–
37.6 –
–
Total equity and liabilities
2 083.4
2 121.9
2 262.5
1 749.4
• SHAREHOLDER REPORT 2008 •
DRDGOLD LIMITED
6
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Quarter
Quarter
Quarter 6 months to
6 months to
6 months to
Dec 2008
Sep 2008
Dec 2007 31 Dec 2008
30 Jun 2008
31 Dec 2007
Rm
Rm
Rm
Rm
Rm
Rm
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Balance at the beginning of the period
1 240.7
1 305.5
1 251.8
1 305.5
1 130.2
143.5
Share capital issued
0.4
–
–
0.4
2.0 27.1
– for acquisition finance and cash
–
–
–
–
–
28.0
– for share options exercised
0.4
–
–
0.4
2.3 –
– for costs
–
–
–
–
(0.3)
(0.9)
Increase in share-based payment reserve
3.1
1.1 0.9 4.2
6.2 0.4
Net profit attributed to ordinary
shareholders
54.7
3.1 93.2 57.8
144.6 850.3
Net (loss)/profit attributed to minority
shareholders
(21.3)
(11.9)
(8.7)
(33.2)
31.9 198.3
Dividends declared
–
(37.6)
–
(37.6)
–
–
Decrease in minorities
–
–
(152.1)
–
(32.0)
(152.1)
Other comprehensive income/(loss)
7.8
(19.5)
(54.9)
(11.7)
22.6 62.7
Balance as at the end of the period
1 285.4
1 240.7
1 130.2
1 285.4
1 305.5
1 130.2
• SHAREHOLDER REPORT 2008 •
DRDGOLD LIMITED
7
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Quarter
Quarter
Quarter 6 months to
6 months to
6 months to
Dec 2008
Sep 2008
Dec 2007 31 Dec 2008
30 Jun 2008
31 Dec 2007
Rm
Rm
Rm
Rm
Rm
Rm
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Net cash in/(out) flow from operations
29.5
25.3 (360.2)
54.8
231.0 (669.9)
Net cash (out)/inflow from investing activities
(81.6)
(46.4)
240.9
(128.0)
(186.5)
2 111.3
Net cash (out)/inflow from financing activities
(149.5)
(2.6)
20.1
(152.1)
27.6 (1 039.5)
(Decrease)/increase in cash and cash equivalents
(201.6)
(23.7)
(99.2)
(225.3)
72.1 401.9
Translation adjustment
1.6
(13.4)
(48.9)
(11.8)
24.8 209.6
Opening cash and cash equivalents
809.0
846.1 897.3 846.1
749.2 137.7
Closing cash and cash equivalents
609.0
809.0 749.2 609.0
846.1 749.2
Reconciliation of net cash in(out) flow
from operations
Profit before taxation
63.0
5.5 7.5
68.5
65.9 20.2
Net operating profit/(loss) from discontinued
operations
–
–
6.6
–
(1.8)
(50.0)
63.0
5.5 14.1 68.5
64.1 (29.8)
Adjusted for:
Movement in gold in process
(24.4)
3.0 (1.3)
(21.4)
(14.6)
(0.7)
Depreciation and impairment
21.9
64.6 19.9 86.5
93.3 39.6
Movement in provision for environmental
rehabilitation
9.0
12.1 4.8
21.1
20.7 9.5
Share-based payments
3.1
1.1 0.9 4.2
6.2 0.4
(Profit)/loss on derivative financial instruments
(39.8)
(7.3)
0.8
(47.1)
88.5 0.8
(Profit)/loss on sale of assets and investments
(10.2)
1.6 –
(8.6)
0.9 (12.0)
Finance expense and unwinding of provisions
(1.8)
(1.6)
(3.9)
(3.4)
3.1 (7.8)
Growth in Environmental Trust Funds
(3.3)
(3.5)
(2.0)
(6.8)
(6.3)
(3.8)
Other non-cash items
1.8
0.9 (18.4)
2.7
(29.3)
17.8
Taxation paid
(24.9)
–
(1.6)
(24.9)
(11.8)
(35.8)
Working capital changes
35.1
(51.1)
(373.5)
(16.0)
16.2 (648.1)
Net cash in/(out) flow from operations
29.5
25.3 (360.2)
54.8
231.0 (669.9)
• SHAREHOLDER REPORT 2008 •
DRDGOLD LIMITED
8
South African operations
Quarter
Quarter
%
Quarter 6 months to
6 months to
6 months to
Blyvoor
Dec 2008
Sep 2008
Change
Dec 2007 31 Dec 2008
30 Jun 2008 31 Dec 2007
Ore milled
Underground
t'000
150
154 (3)
164 304
329 358
Surface
t'000
889
884 1
937
1 773
1 926
1 793
Total
t'000
1 039
1 038
–
1 101
2 077
2 255
2 151
Yield
Underground
g/t
4.56
4.65 (2)
4.80
4.61
4.46 4.92
Surface
g/t
0.40
0.32 25
0.30 0.36
0.32 0.31
Total
g/t
1.00
0.96 4
0.97
0.98
0.92 1.07
Gold produced
Underground
oz
21 991
23 020
(4)
25 302
45 011
47 164
56 649
kg
684
716 (4)
787
1 400
1 467
1 762
Surface
oz
11 414
9 034
26
9 131
20 448
19 740
17 619
kg
355
281 26
284 636
614 548
Total
oz
33 405
32 054
4
34 433
65 459
66 904
74 268
kg
1 039
997 4
1
071
2 036
2 081
2 310
Cash operating costs
Underground
US$ per oz
765
934 18
823 852
815 736
ZAR per kg
252 617
233 929
(8)
179 621
243 059
201 706
164 709
ZAR per tonne
1 152
1 088
(6)
862
1 119
899 811
Surface
US$ per oz
251
451 44
418 339
364 412
ZAR per kg
84 020
112 836
26
91 415
96 752
89 896
92 175
ZAR per tonne
34
36 6
28 35
29 28
Total
US$ per oz
590
798 26
715 692
682 659
ZAR per kg
195 012
199 799
2
156 232
197 356
168 716
147 502
ZAR per tonne
195
192 (2)
152 193
156 158
Cash operating profit
US$ million
6.8
2.1 224 2.9 8.9
15.7 5.7
ZAR million
62.3
16.7 273 19.6 79.0
116.8 39.6
Capital expenditure (net)
US$ million
3.1
2.2 (41)
2.5 5.3
5.8 4.4
ZAR million
29.2
17.4 (68)
17.0 46.6
44.1 30.7
Total gold production rose by 4% to 33 405 oz, driven by a 26% increase in gold produced from surface sources to 11 414 oz.
Underground gold production was 4% lower at 21 991 oz, reflecting both a 3% decline in underground throughput to 150 000 t and a 2% decline in
the average underground yield to 4.56 g/t. The lower underground gold production is reflective both of a slower than expected return to normal
levels of operation following the previous quarter's Section 54 closures and of the Section 54 closure that followed a fatal accident during the quarter
under review, which resulted in the loss of two days of production.
Higher surface gold production resulted primarily from a 25% increase in the average surface yield to 0.40 g/t, a consequence of recovering the lower
portions of the main tailings dams where yields are characteristically higher. Surface throughput rose by 1% to 889 000 t.
Total cash operating costs were 2% lower at R195 012/kg, a consequence of the increase in total gold production. Underground cash operating costs
increased by 8% to R252 617/kg and surface cash operating costs declined by 26% to R84 020/kg.
Cash operating profit was 273% higher at R62.3 million, reflecting higher gold production and a much stronger average Rand gold price received, the
latter resulting from a more favourable average Rand/US Dollar exchange rate during the reporting period.
Capital expenditure increased by 68% to R29.2 million, a major line item being the purchase of additional self-contained self-rescuers.
Production build-up on the Way Ahead Project continues according to plan with a rate of 610 m
2
per month being achieved by the end of the quarter
under review and 1 200 m
2
per month targeted by the end of the June 2009 quarter.
The 15/29 Incline Project has encountered a slight delay due to late supplier delivery of the winders.
Some 100 former production employees of ERPM mine which has been placed on care and maintenance have been transferred to Blyvoor.They will
be deployed to a project to open up more face length on the Main Reef, the objective being to boost volumes at maintained real cost levels.
KEY OPERATING AND FINANCIAL RESULTS (UNAUDITED)
• SHAREHOLDER REPORT 2008 •
DRDGOLD LIMITED
9
Quarter
Quarter
%
Quarter 6 months to
6 months to
6 months to
Crown
Dec 2008
Sep 2008
Change
Dec 2007 31 Dec 2008
30 Jun 2008 31 Dec 2007
Ore milled
t'000
1 531
2 066
(26)
2 138
3 597
3 950
4 285
Yield
g/t
0.36
0.36 –
0.30
0.36
0.33 0.33
Gold produced
oz
17 747
23 985
(26)
20 737
41 732
42 246
45 108
kg
552
746 (26)
645
1 298
1 314
1 403
Cash operating costs
US$ per oz
575
544 (6)
617 557
543 562
ZAR per kg
189 848
136 075
(40)
134 798
158 943
134 479
125 628
ZAR per tonne
68
49 (39)
41 57
48 41
Cash operating profit
US$ million
3.1
7.7 (60)
3.6 10.8
16.3 7.7
ZAR million
36.3
60.0 (40)
24.6 96.3
121.8 53.9
Capital expenditure (net)
US$ million
1.2
1.6 25 0.3 2.8
5.3 0.5
ZAR million
12.8
12.2 (5)
2.2
25.0
38.4 3.7
Total gold production was 26% lower at 17 747 oz, resulting from a 26% decline in total throughput to 1 531 000 t.The average yield was unchanged at
0.36 g/t.
Reasons for the lower throughput are twofold: continuing implementation of the decision announced in the previous quarter to adjust throughput
downward to 400 000 tpm in order to address the diminishing capacity of the current tailings deposition site, and a delay of approximately one month
in commissioning the Top Star reclamation site.
Regarding the creation of additional tailings deposition capacity, various options – including construction of a pipeline to Ergo's Withok tailings deposition
site – are being considered currently.
While two factors delayed the Top Star commissioning – slowing of construction to contain dust pollution during the dry months before the onset of
the summer rains, and removal of higher volumes of overburden than was initially anticipated – monthly throughput had reached the targeted 100 000
tpm by the end of the quarter.This is half the planned full recovery rate.
Due to lower gold production, Crown's cash operating costs for the quarter were 40% higher at R189 848/kg and cash operating profit 40% lower at
R36.3 million.
Capital expenditure was 5% higher at R12.8 million, the major components of which were completion of Top Star construction and tailings deposition
site maintenance.
Quarter
Quarter
%
Quarter 6 months to
6 months to
6 months to
ERPM
Dec 2008
Sep 2008
Change
Dec 2007 31 Dec 2008
30 Jun 2008 31 Dec 2007
Ore milled
Underground
t'000
36
64 (44)
72 100
146 157
Surface
t'000
298
379 (21)
504 677
849 1 010
Total
t'000
334
443 (25)
576 777
995 1 167
Yield
Underground
g/t
5.19
5.30 (2)
7.11
5.26
4.83 6.76
Surface
g/t
0.30
0.32 (6)
0.35
0.31
0.36 0.40
Total
g/t
0.83
1.04 (20)
1.19 0.95
1.01 1.25
Gold produced
Underground
oz
6 011
10 899
(45)
16 463
16 910
22 665
34 147
kg
187
339 (45)
512 526
705 1 062
Surface
oz
2 894
3 923
(26)
5 626
6 817
9 774
12 893
kg
90
122 (26)
175 212
304 401
Total
oz
8 905
14 822
(40)
22 089
23 727
32 439
47 040
kg
277
461 (40)
687 738
1 009
1 463
Cash operating costs
Underground
US$ per oz
1 005
1 062
(5)
777
1 042
966 710
ZAR per kg
354 011
265 794
(33)
170 171
297 156
239 404
158 765
ZAR per tonne
1 839
1 408
(31)
1 210
1 563
1 156
1 072
Surface
US$ per oz
1 157
840 (38)
729 975
564 606
ZAR per kg
370 122
210 385
(76)
159 537
278 198
141 674
135 653
ZAR per tonne
70
68 (3)
55 69
51 54
Total
US$ per oz
1 054
1 003
(5)
765
1 022
845 681
ZAR per kg
359 245
251 130
(43)
167 463
291 710
209 959
152 430
ZAR per tonne
194
261 26
200 225
213 191
Cash operating (loss)/
profit
US$ million
(3.0)
(2.1)
(43)
0.6
(5.1)
2.0 2.4
ZAR million
(28.8)
(16.5)
(75)
3.5
(45.3)
15.7 16.5
Capital expenditure (net)
US$ million
2.5
0.6 (317)
1.3
3.1
1.9 2.2
ZAR million
23.5
4.3 (447)
9.0 27.8
14.9 15.2
ERPM's results reflect the effect of only one month of underground mining – a consequence of the previously-announced suspension of the
underground mining operation.
Total gold produced was 40% lower at 8 905 oz, reflecting a 45% decline in underground gold production to 6 011 oz and a 26% decline in surface
gold production to 2 894 oz.
KEY OPERATING AND FINANCIAL RESULTS (UNAUDITED)
• SHAREHOLDER REPORT 2008 •
DRDGOLD LIMITED
10
KEY OPERATING AND FINANCIAL RESULTS (UNAUDITED)
Underground throughput for the month of October was 36 000 t, down 44% from the previous full quarter's 64 000 t. The average yield was 2%
lower at 5.19 g/t.
Lower surface gold production resulted from a 6% decline in the average yield to 0.30 g/t as recovery of lower grade material from the southern face
of the Cason dump continued. Surface throughput was down 21% to 298 000 t.
Total cash operating costs were 43% higher at R359 245/kg, reflecting the lower gold production. Underground cash operating costs rose by 33% to
R354 011/kg and surface cash operating costs by 76% to R370 122/kg.
The cash operating loss, quarter on quarter, increased by 75% to R28.8 million.
Capital expenditure increased to R23.5 million from R4.3 million, reflecting a land acquisition forming part of an overall plan to realise value for
DRDGOLD's property holdings.
Exploration and prospecting
ERPM
All exploration drilling has been terminated due to ERPM’s underground operations having been suspended. Final resource estimation for ERPM began
during January 2009.
Extension 1
The following mining activities took place in the Extension 1 area in accordance with the revised prospecting programme (all figures in situ):
Area
m
2
SW
G/t
Tons
Grams
Remarks
71e 2e
40
1.10
11.9
121
1 435
71e 3ae
198
1.37
0.1
743
74
Faulting
71e 3e
34
1.21
5.4
113
609
Faulting
Total
272
977
2 118
Extension 2
Copies of the Sallies exploration borehole logging and reports from Anglogold Ashanti were exchanged for sampling data and reports from Blyvoor.
Blyvoor
The exploration hole at 38-33 intersected Main Reef and assayed at 1 656 cmg/t. Cover drilling is in progress at 41-18, 38-28 and 38-21.The geologist
from ERPM has been seconded to Blyvooruitzicht to assist with the Main Reef exploration.
Three recovery percentage checks for the Doornfontein No 1, 2 and 3 slimes dams were completed and returned respective values of 37.6, 33.4 and
43.9%.
Crown and Ergo
Phase 2 drilling of the Marievale complex has been completed and a survey of all the Marievale slimes dams is in progress.
Discontinued operations
Quarter
Quarter
%
Quarter 6 months to
6 months to
6 months to
Tolukuma
Dec 2008
Sep 2008
Change
Dec 2007 31 Dec 2008
30 Jun 2008 31 Dec 2007
Ore milled
t'000
–
–
–
11
–
–
56
Yield
g/t
–
–
–
9.64
–
–
7.45
Gold produced
oz
–
–
–
3 394
–
–
13 427
kg
–
–
–
106
–
–
417
Cash operating costs
US$ per oz
–
–
–
1 336
–
–
1 098
ZAR per kg
–
–
–
292 887
–
–
248 751
ZAR per tonne
–
–
–
2 822
–
–
1 852
Cash operating loss
US$ million
–
–
–
(1.7)
–
–
(2.6)
ZAR million
–
–
–
(11.5)
–
–
(18.0)
Capital expenditure (net)
US$ million
–
–
–
0.1
–
–
2.2
ZAR million
–
–
–
0.3
–
–
15.3
• SHAREHOLDER REPORT 2008 •
DRDGOLD LIMITED
11
Continuing operations
Total Mine
R000 unless otherwise stated
Crown
ERPM
Blyvoor
Operations
Total cash costs
Dec 08 Qtr
113 822
134 971
190 908
439 701
Sep 08 Qtr
109 130
121 793
212 802
443 725
6 Mths to Dec 08
222 952
256 764
403 710
883 426
Movement in gold in process
Dec 08 Qtr
(91)
3 796
20 701
24 406
Sep 08 Qtr
1 243
1 991
(6 245)
(3 011)
6 Mths to Dec 08
1 152
5 787
14 456
21 395
Less: Production taxes, rehabilitation and other
Dec 08 Qtr
5 185
4 028
4 287
13 500
Sep 08 Qtr
5 111
3 035
3 162
11 308
6 Mths to Dec 08
10 296
7 063
7 449
24 808
Less: Retrenchment costs
Dec 08 Qtr
–
31 111
–
31 111
Sep 08 Qtr
–
858
–
858
6 Mths to Dec 08
–
31 969
–
31 969
Less: Corporate and general administration costs
Dec 08 Qtr
3 750
4 117
4 705
12 572
Sep 08 Qtr
3 750
4 120
4 195
12 065
6 Mths to Dec 08
7 500
8 237
8 900
24 637
Cash operating costs
Dec 08 Qtr
104 796
99 511
202 617
406 924
Sep 08 Qtr
101 512
115 771
199 200
416 483
6 Mths to Dec 08
206 308
215 282
401 817
823 407
Gold produced – kgs
Dec 08 Qtr
552
277
1 039
1 868
Sep 08 Qtr
746
461
997
2 204
6 Mths to Dec 08
1 298
738
2 036
4 072
Total cash operating costs – R/kg
Dec 08 Qtr
189 848
359 245
195 012
217 839
Sep 08 Qtr
136 075
251 130
199 799
188 967
6 Mths to Dec 08
158 943
291 710
197 356
202 212
Total cash operating costs – US$/oz
Dec 08 Qtr
575
1 054
590
654
Sep 08 Qtr
544
1 003
798
755
6 Mths to Dec 08
557
1 022
692
709
CASH OPERATING COSTS RECONCILIATION
DIRECTORS
(*British) (**American)
Executives:
DJ (Niel) Pretorius (Chief Executive Officer)
CC Barnes (Chief Financial Officer)
Non-executive:
J Turk**
Independent non-executives:
GC Campbell* (Non-Executive Chairman)
RP Hume
EA Jeneker
Company Secretary:
TJ Gwebu
For further information, contact Niel Pretorius at:
Tel: (+27-11) 219-8700
Fax: (+27-11) 476-2637
website: http://www.drdgold.com
Ebsco House 4, 299 Pendoring Avenue, Blackheath
Randburg, South Africa
PO Box 390, Maraisburg, 1700, South Africa