Gold bars are displayed at a gold jewellery shop in the northern Indian city of Chandigarh. REUTERS/Ajay Verma
Gold bars are displayed at a gold jewellery shop in the northern Indian city of Chandigarh. REUTERS/Ajay Verma

Crown closure knocks DRDGold into a loss

By Business Reporter Time of article published Feb 15, 2017

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Johannesburg – DRDGold says gains in the rand price for gold boosted its revenue 5 percent to R1.2 billion in the six months to December.

The miner notes that the average rand gold price was up 16 percent to R572 443 a killogramme, which countered the 10 percent decrease in gold sold.

In a statement issued on Wednesday, the miner also notes total operating costs were 6 percent higher at R1.05 billion, which translated into operating profit of R172.6 million, a 4 percent gain year-on-year.

It adds its operating margin was stable at 14.5 percent.

However, the company recorded a headline loss of R10.2 million, or 2.4c a share, compared with a gain of R10.9 million a year ago. This was mostly due to the commencement of the final clean-up and closure of various Crown sites, causing accelerated depreciation and retrenchment costs of R18 million each, it says.

Gold production was 7 percent lower at 2 100 kg as throughput and yield declined, it notes.

Read also: DRDGold shares are hit by profit news

DRDGold adds two new reclamation sites have been commissioned in recent weeks. Reclaimed slimes from 4L2 – which contains some 11.9 million tons at 0.30g/t – will report to the City Deep plant at a rate of 300 000 tpm and then to the Ergo plant for gold extraction.

Reclaimed slimes from 4L37 – which contains 7.2 million tons at at 0.28g/t – will report directly to the Ergo plant at a rate of 300 000tpm for gold extraction for a period of 24 months.

Two other slimes dams – 4L50, containing 20.3 million t at 0.26g/t and 7L15, containing 17.1 million t at 0.26g/t – are being assessed to decide which should be prioritised for reclamation, it says.

DRDGold says, these new reclamation sites, together with the phasing out of the West Rand, are expected to enhance consistency in volume delivery and will “obviously” also come in at a much lower unit cost to reclaim than the West Rand clean-up sites.



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