[miningmx.com] – DRDGOLD is set to sever its last remaining links with underground gold mining – the activity to which it was famously (and sometimes dangerously) leveraged – announcing today it would sell the century-old East Rand asset, the ERPM gold mine.
This was after spending R12m refurbishing and recommissioning ERPM’s Cason shaft through which Niel Pretorius, DRDGold CEO, said some 21 million ounces of gold was accessible. A further R13m was spent on a 6,000 tonnes/month plant at ERPM.
“We expect these to make ERPM self-sustaining, in order to support the cost of exploration required to add to value to the gold resource,” said Pretorius in comments to the group’s December quarter operating and financial figures.
“This asset is now held for sale and we will be appointing corporate advisors to assist in the process,” he said.
DRDGold also said that its Zimbabwe exploration assets had indicated underground mining.
“Underground mining is not in line with DRDGOLD’s strategy, so these prospects will be packaged for disposal. We are currently finalising a feasibility study on the reclamation of gold tailings,” Pretorius said.
DRDGold underlined the value of its shift to surface mining producing a 37% increase in operating profit to R238.7m in the December quarter and a 25% improvement in quarter-on-quarter headline share earnings of 25 cents.
This was based on a 9% improvement in gold production to 39,031 ounces from its Crown/Ergo retreatment plant. At some 6 million tonnes, throughput was 8% higher owing to the stabilisation in the operation of the new Crown/Ergo pipeline. The yield was unchanged at 0.20g/t while the rand gold price increased some 7% on average.
From a shareholders’ point of view, the happy outcome is a 14c per share interim dividend. “In the second half, we will continue to focus on maintaining tonnage volumes to the plant and on completing the flotation/fine-grind circuit,” said Pretorius.
