South Africa’s fourth-biggest gold producer, DRDGold, reported a 4% rise in gold production for the quarter to end-December and a return to profit owing to lower operating costs.
The company, a mid-tier, unhedged gold producer, said output in the second quarter rose to 59 866 ounces.
Revenue for the quarter increased by 12% to R499,6-million due to the higher output and a 12% increase in the average rand-gold price.
Operating costs fell 4% to R416,5-million. South African gold miners sell their gold in dollars, and pay their costs in rand.
Headline earnings — the key profit measure in South Africa, stripping out capital, non-trading and some extraordinary items — rose to 1,4 cents per share, from a loss per share of 13,1 cents the previous quarter.
Given the strength of the rand, the company said it would focus on reducing its exposure to risk, controlling costs and managing margins in the near term.
“The rand’s strong trending continued during the quarter and is showing little sign of softening against the major currencies,” the company said.
DRDGold said that along with a local partner, it would make an initial “modest” investment in a prospecting project in Zimbabwe.
South Africa-focused DRDGold has a mix of assets, including underground mines, surface re-treatment operations and exploration.
The company did not declare an interim dividend. — Reuters