DRDGOLD forecast full year gold production for the 12 months ended June to come in at the lower end of its 165,000 to 175,000 ounce guidance, and unit costs would increase.
Commenting in a production report for the six months ended December this week, the South African gold producer said cash operating unit cost guidance would increase from R770 000/kg to R800 000/kg.
This was despite an expected easing in costs during the second half of the year. Unit costs in the first six months of the year would come in 14% higher – or R257.5m – to a total of R2.1bn owing to increases in machine hire costs and contract reclamation costs at its Ergo site and increases mainly in reagent usage at Far West Gold Recoveries (FWGR).
Electricity costs also increased as a result of the reclamation of Driefontein 3 and the installation of a high shear agitator at the Driefontein 2 plant to release more gold at FWGR, the firm said in its production update.
Despite this, interim and share earnings will be higher for the six months coming in between 65.3 and 71.5 South African cents respectively – an increase of between 5% and 15%. This compares to earnings of 62.3c/s for the six months to December in 2022.
The improvement in earnings was largely owing to a strong dollar and rand gold price.
As at December 31, DRDGOLD held R1.53bn in cash and cash equivalents compared to R2.39bn a year earlier. The lower cash is a result of spending R1.1bn in investing activities, a year-on-year increase of R685.7m.