DRDGold third-quarter output up, starts Zim exploration

South Africa’s fourth-biggest gold producer, DRDGold, reported a 4% rise in gold production for the third quarter, and said on Friday it would start exploration for gold in Zimbabwe.

The company, a mid-tier, unhedged gold producer, said the higher output resulted from improved gold mining at its Blyvoor underground operations and production build-up at its Ergo mine, which it would seek to further increase in the coming months.

DRDGold’s output in the third quarter to end-March rose to 62 404 ounces, the company said in a statement.

Headline earnings, the key profit measure in South Africa, stripping out capital, non-trading and some extraordinary items, fell to 0,4 cents per share after accounting for some impairments, from 1,4 cents in the second quarter.

DRDGold reported an 11% increase in cash operating profit for the quarter at R96,9-million, while cash operating unit costs fell 1% to 221 400 per kg.

The average rand gold price received during the quarter was just 1% higher at 269 980 a kg. South African gold mining companies sell their gold in dollars and pay costs in rand.

South Africa-focused DRDGold, which has a mix of assets, including underground mines, surface re-treatment operations and exploration, said it planned to explore in Zimbabwe.

The company said preparations for an initial 28-week programme of exploration of the Leny claims, jointly held by DRDGold and Zimbabwe partner Chizim Investments, have begun.

Limited mining will take place during exploration, with any recovered gold helping to offset exploration costs.—Reuters