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DRDGOLD in Zimbabwe foray

Allan Seccombe | Fri, 29 Jan 2010 11:45
[miningmx.com] -- DRDGOLD is looking at prospects in Zimbabwe to give it growth after it turned in an improved December quarter with production at its Ergo surface operation rising and a 12% higher received gold price contributing to an operating profit against last quarter’s loss.

Gold production increased four percent in the quarter against the September quarter’s 57,000 oz, as higher surface production offset an 11% fall in output from the Blyvoor underground mine.

Cash costs fell by some eight percent from R243,684/kg in the September quarter as higher gold output, a reduced workforce at Blyvoor and the end of winter electricity tariffs benefited the company.

The ramp up at the Ergo operation showed a sizeable step up in gold production to nearly 10,000 oz from 5,240 oz before.

DRDGOLD is increasingly focusing on surface operations, with nearly three quarters of its gold coming from these projects. It has agreed to sell 60% of its Blyvoor gold mine to newcomer Aurora Empowerment Systems for R296m. This money will go towards a new pipeline DRDGOLD is studying and improving its surface operations.

It has also sold the ERPM gold processing plant at its defunct ERPM mine to Aurora for R20m, in a transaction which will give DRDGOLD access to Aurora’s dumps on the East Rand. The Grootvlei dump contains 80 million tonnes of material with a grade of 0.27 grams/tonne (g/t).

The foray into Zimbabwe will be on a small and carefully considered scale, said CEO Niel Pretorius. He said the main objective was to build up relationships with authorities there, find a partner to meet the country’s empowerment requirements and seek out viable near-surface prospects that could be brought into production quickly and relatively cheaply.




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