DRDGold rallies on higher production numbers

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DRDGold rallies on higher production numbers

Published Date: 2019-05-09 | Source: Stephen Gunnion | Author: Stephen Gunnion

DRDGold rallies on higher production numbers

The mine dump reprocesser benefitted from last year's acquisition of Far West Gold Recoveries from Sibanye-Stillwater.

DRDGold rallied on Tuesday after it reported a 15% rise in third-quarter as its Far West Gold Recoveries (FWGR) project kicked into gear.

In an operating update, the mine tailings re-treatment specialist said it produced 41,120 ounces of gold in the three months to end-March, up from 35,732 ounces in December. That includes 4,790 ounces from FWGR. Sales rose 10% to 10,189 ounces at an average gold price of $1,306 per ounce. The company also benefitted from lower costs over the period.

It reported adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of R58.3 million, double that of the December quarter. It attributed the rise to a higher gold price and stable cash operating costs. The EBITDA number doesn't reflect the revenues and productions costs of FWGR, which are included in the capital expenditure of the project until final commissioning is completed.

DRDGold bought FWGR from Sibanye-Stillwater last July in a deal that increased its gold reserves by about 82%. In exchange, Sibanye-Stillwater took a 38% stake in DRDGold. The West Rand mine dumps contain higher grade material than its tailings at Ergo Mining on the East Rand.

Its shares closed 5.4% higher at R2.91 on Tuesday.

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