DRDGOLD raises dividend after strong first half

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DRDGOLD raises dividend after strong first half

Published Date: 2021-02-17 | Source: Stephen Gunnion | Author: Stephen Gunnion

DRDGOLD raises dividend after strong first half

The mine tailings pretreatment specialist is tracking towards the upper end of its full-year production guidance.

DRDGOLD has raised its interim dividend by 60% after a big rise in the gold price more than offset a small dip in production. It is now mulling the second phase of its Far West Gold Recoveries (FWGR) operation but says all its capital investment strategies hinge on the risks posed by Covid-19.

The mine tailings retreatment specialist grew revenue by 41% to R2.98 billion for the six months to end-December while operating profit doubled to R1.44 billion. This was largely due to a 41% rise in the rand price it received for its gold. Overall gold production declined by 2% to 95,938 ounces, attributable mainly to a 6% fall in production at FWGR as it processed a lower-grade portion of the No. 5 mine dump at Driefontein.

Increased capital expenditure at FWGR and its Ergo operation on the East Rand accounted partly for a 17% rise in all-in sustaining costs to 597,605/kg for the period. Earnings and headline earnings per share jumped 129% to 111c and it raised its dividend to 40c per share from 25c a year earlier.

DRDGOLD said work on a definitive feasibility study and planning for the FWGR Phase 2 project had continued and it had submitted an amended design for the regional tailings storage facility to the Department of Water and Sanitation in November.

The company said it was tracking towards the upper end of its full-year production guidance of 185,000 ounces and well within its cash operating cost guidance of about R535,000/kg. That was despite the challenges of Covid-19, electricity restrictions due to Eskom and severe weather conditions.

The company's shares declined by 5.6% to R14.78 yesterday.





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