[miningmx.com] – DRDGOLD will know from the weekend whether its efforts to recalibrate its high-grade gold retreatment technology has borne fruit, or if a R600m capital outlay has been for naught.
The company said in an announcement to the Johannesburg Stock Exchange today that its flotation fine-grind operations at Ergo, dumps east of Johannesburg consisting of hundreds of tonnes of previously mined gold, would be fully operational by January 23.
DRDGold temporarily de-commissioned the circuit last year after technical glitches produced less than optimal results. This was after several years of building the technology in a strategy which also saw it close its remaining high cost underground mines.
There are early signs that the decision to suspend production last year was the correct one after the company reported a 6% increase in gold production for the December quarter – a development that led to a 5% increase in operating profit.
Niel Pretorius, CEO of DRDGold, said the improvement in operating profit, which also bolstered cash and cash equivalents by 19% to about R242m (R204m as of the end of the September quarter), was due to higher gold production.
Higher gold output was related to “… the restoration of metallurgical efficiencies and operating business improvements following the suspension of the company’s new flotation and fine-grind circuit in April 2014,” Pretorius said in a statement.
Following the successful completion of test work in December 2014, the second flotation stream was restarted in the second week of January 2015 while the third stream is expected to be up and running by the end of the week, the company said.
DRDGold, which is due to report its full operating and financial interim figures on February 19, saw its shares rise by 4.7% on the JSE today, and by some 83% since November.
However, DRDGold has taken some buffeting. On a 12 month basis the stock is down 20% after reaching R4.80 roughly a year ago. The stock is currently trading at R3,32/share.
