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DRDGold narrows its loss to R115m
September 22, 2006
By Justin Brown
Johannesburg - Gold producer DRDGold, which continues to incur losses because of lower production and operational difficulties at its foreign mines, yesterday announced that its loss for the year to June had narrowed to R115 million from R545 million.
The loss came despite rand and dollar gold prices climbing to all-time highs during the period under review.
Group bullion output fell to 527 401 ounces during the year from 768 886 ounces because of the decline at the company's Australasian mines and the liquidation of North West operations that were sold to Simmer and Jack Mines.
DRDGold's production has declined by about 50 percent since 2002, when the company produced 1.03 million ounces.
Depreciation of the company's mines failed to weather the strengthening in the rand exchange rate.
Although the gold producer's South African mines reported an increase in production to 315 976 ounces from 251 902 ounces, production from Australasian operations dropped to 211 425 ounces compared with 317 134 ounces previously.
In Australasia, DRDGold has a 79 percent shareholding in Australian-listed Emperor Mines and stakes in the Vatukoula gold mine in Fiji, and the Tolukuma and Porgera mines in Papua New Guinea.
"The results reflect operational challenges, with all three operations producing less gold than in previous years at greater-than-expected total costs per ounce," Emperor Mines said last week.
Revenue rose to R1.6 billion from R1.2 billion in the previous year because of higher gold prices.
DRDGold reported a net cash outflow from operations for the year of R13 million, down from R114 million.
The gold producer's chief executive, Mark Wellesley-Wood, said the company had concluded an agreement with AngloGold Ashanti to purchase the Top Star dump in central Johannesburg and resume operations.
The company is conducting exploration drilling at its ERPM mine on the East Rand.
DRDGold shares yesterday gained 1.99 percent to close at R9.74. The gold mining sector added 0.05 percent.
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