DRDGold to be more volume driven at Blyvooruitzicht
miningweekly.com
By: Chanel de Bruyn
26th August 2010
JOHANNESBURG (miningweekly.com) – While JSE-listed gold-miner DRDGold’s Blyvooruitzicht (Blyvoor) mine, near Carletonville, was trending towards sustainability, CEO Niël Pretorius, stressed that it was critical for the mine to become more volume driven.
DRDGold on Wednesday reported a 3% decline in overall gold output to 241 194 oz for the year ended June 30, 2010, compared with the 247 690 oz produced in the previous year, mainly as a result of lower output from the Blyvoor mine.
The company indicated that volumes at the mine were still recovering after a seismic event caused damage to underground production areas in May 2009.
A month-long strike over wages by nearly 4 000 workers in September 2009, had also resulted in a drop in output at the mine, with DRDGold previously having indicated that it was losing about 230 oz/d in production owing to the industrial action.
CFO Craig Barnes noted during a presentation of the company’s results that Blyvoor’s volumes had started picking up “nicely”.
However, the 26 685 oz produced at the mine during the quarter ended June 30, 2010, were still down by 7% compared with output in the March quarter. Underground gold production fell by 2%, while surface gold production was down 23%.
A lot of effort was being put into mining more tons at the mine with the number of in-stope employees having been increased, Pretorius said.
DRDGold would, going forward, focus on increasing the opening up and development of the face length at the mine and on carefully managing the ore mix to reduce the company’s reliance on high-grade areas at the operation.
Barnes said that the mine was likely to “lift its head” early in the 2011 calendar year.
CROWN/ERGO PIPELINE
Meanwhile, Pretorius said that the company would spend R300-million on the Crown/Ergo pipeline project during the 2011 financial year.
The pipeline, which would link two of DRDGold’s Crown plants, in the Central Witswatersrand area, with the Ergo Brakpan deposition site, was now under construction, with R36-million having been spent on the project in the fourth quarter of the 2010 financial year.
The project was aimed at restoring Crown’s maximum deposition capacity to 600 000 t/m, which in turn would allow potential new resources on the Western and Central Witwatersrand areas to be brought to account and increase production.
The Crown operations’ deposition capacity had diminished to 400 000 t/m in the 2010 financial year, owing to constraints at the Nasrec deposition site.
The pipeline would be completed by August next year.
ZIMBABWE EXPLORATION
DRDGold was also bullish on Zimbabwe, saying that there was significant potential for gold mining in that country.
The gold miner, which was exploring for gold with 50:50 joint-venture (JV) partner Chizim Gold, reported an 80% increase in the JV’s exploration area, with the number of claims having increased to 46, up from the previous 16 claims held.
More claims were expected to be added in the first quarter of the 2011 financial year, said Pretorius.
He noted that drilling had started at three of the identified targets in the past week.
The JV planned to do limited gold recovery at these sites as part of a mass sampling programme.
FINANCIAL RESULTS
DRDGold recorded an 84% increase in net profit to R203,3-million in the 2010 financial year, up from the R110,7-million profit recorded the year before.
Headline earnings, however, fell by 62% to R48,9-million during the year, compared with headline earnings of R127,4-million in the 2009 financial year.
Revenues increased by 4% to just under R2-billion, compared with the R1,9-billion earned in the year ended June 2009, as the rand/gold price had increased by 7% to R267 292/kg.
Meanwhile, headline earnings for the fourth quarter rose to R91,5-million, compared with the R1,6-million recorded for the quarter ended March 31, 2010. |
