DRDGold said on Thursday that it will push ahead with South African gold mining as well as dump-retreatment projects despite power concerns.
”We believe the most constructive course of action is for government, Eskom and key major consumers such as ourselves to continue to cooperate in both finding and applying workable solutions to the power dilemma,” said chief executive John Sayers in announcing the company’s results for the quarter ending December 31 2007.
Sayers said the company has successfully worked with Eskom to save power at its Blyvoor operation in the past quarter, and that Eskom’s advance warnings of impending power cuts allow for a measure of planning and safety for the company.
Group gold production from continuing operation was 13% lower for the quarter.
The company said this was mainly because seven production shifts at Blyvoor had been lost when the safety inspectorate at the Department of Minerals and Energy had stopped underground operations after two fatalities in October 2007.
The breaking down of equipment, including a main ventilation fan and a sub-shaft man-winder, also contributed to the lower production, which resulted in 4% lower revenue at R416,9-million.
After accounting for cash operating costs, group revenue remained virtually unchanged at R369,3-million.
”Cash operating profit was 24% lower at R47,6-million,” said DRDGold.
Sayers said the company believes the Department of Minerals and Energy’s seven-day stoppage was ”unnecessary”. However, ”it is pleasing to report that the parties are now addressing their mutual concern about mine safety in a more constructive and pragmatic manner”, he said.
Sayers also said the company is focused on ongoing and substantive infrastructure maintenance to prevent equipment breakdowns. ”In addition to growth, there is no more sensible application of the company’s healthy cash reserves.” — Sapa