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DRD - Drdgold Limited - Report to shareholders for the quarter and year
ended 30 June 2010
DRDGOLD LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1895/000926/06)
JSE trading symbol: DRD
ISIN: ZAE000058723
Issuer code: DUSM
Nasdaq trading symbol: DROOY
("DRDGOLD" or "the Group")
REPORT TO SHAREHOLDERS FOR THE QUARTER AND YEAR ENDED 30 JUNE 2010
GROUP RESULTS
KEY FEATURES
Dividend declared of 5 cents per share
Operating profit of R91.5 million for the quarter
Headline earnings increased to 23.9 cents per share for the quarter
No fatalities : continued drive for safety improvement
Ergo : higher volumes, lower costs improve margin
Crown/Ergo pipeline goes ahead
Blyvoor trending towards stability
Zimbabwe : 80% increase in exploration area
REVIEW OF OPERATIONS
GROUP Quarter Quarter % Quarter
Jun 10 Mar 10 Change Jun 09
Gold production oz 61 632 62 404 (1) 57 775
kg 1 917 1 941 (1) 1 797
Gold sold oz 57 293 62 404 (8) 55 234
kg 1 782 1 941 (8) 1 718
Cash operating costs US$/oz 1 004 913 (10) 855
ZAR/kg 244 331 221 400 (10) 235 499
Gold price received US$/oz 1 204 1 113 8 900
ZAR/kg 292 769 269 980 8 244 927
Capital expenditure US$ million 8.9 4.2 (112) 13.7
ZAR million 67.5 31.3 (116) 117.3
12 months to 12 months to %
30 Jun 10 30 Jun 09 Change
Gold production oz 241 194 247 690 (3)
kg 7 502 7 704 (3)
Gold sold oz 239 427 245 149 (2)
kg 7 447 7 625 (2)
Cash operating costs US$/oz 953 730 (30)
ZAR/kg 233 112 212 228 (10)
Gold price received US$/oz 1 092 861 27
ZAR/kg 267 292 250 589 7
Capital expenditure US$ million 25.5 38.4 34
ZAR million 193.9 345.1 44
STOCK
ISSUED CAPITAL
384 884 379 ordinary no par value shares
5 000 000 cumulative preference shares
Total ordinary no par value shares issued and committed: 404 378 780
STOCK TRADED JSE NASDAQ*
Avg. volume for the quarter per day (000) 481 1 230
% of issued stock traded (annualised) 33 83
Price - High R4.06 US$0.543
- Low R3.30 US$0.407
- Close R3.41 US$0.435
*This data represents per share data and not per American Depositary
Share("ADS") data - one ADS reflects ten ordinary shares.
FORWARD-LOOKING STATEMENTS
Many factors could cause the actual results, performance or achievements of
DRDGOLD to be materially different from any future results, performance or
achievements that may be expressed or implied by such forward-looking
statements including among others, adverse changes or uncertainties in
general economic conditions in the markets DRDGOLD serves, a drop in the
gold price, a sustained strengthening of the Rand against the Dollar,
regulatory developments adverse to DRDGOLD or difficulties in maintaining
necessary licences or other governmental approvals, changes in DRDGOLD`s
competitive position, changes in business strategy, any major disruption in
production at key facilities or adverse changes in foreign exchange rates
and various other factors.
These risks include, without limitation, those described in the section
entitled `Risk Factors` included in the annual report for the fiscal year
ended 30 June 2009 which was filed with the United States Securities and
Exchange Commission on 27 November 2009 on Form 20-F. Shareholders should
not place undue reliance on these forward-looking statements, which speak
only as of the date thereof. DRDGOLD does not undertake any obligation to
publicly update or revise these forward-looking statements to reflect
events or circumstances after the date of this report or to the occurrence
of unanticipated events. Any forward-looking statements included in this
report have not been reviewed and reported on by DRDGOLD`s auditors.
OVERVIEW
Dear shareholder
Safety, health and environment
It is very pleasing to report that the Group recorded a quarter free of
fatalities. Performance in respect of other key safety measures was varied.
Blyvooruitzicht Gold Mining Company Limited ("Blyvoor") recorded a
reduction in its Dressing Station Injury Frequency Rate ("DSIFR") but
deteriorations in its Disabling Injury Frequency Rate ("DIFR") and
Reportable Injury Frequency Rate ("RIFR"). While Crown Gold Recoveries
(Pty) Limited`s ("Crown") RIFR improved, its DSIFR and RIFR deteriorated.
Various operation-specific, mini safety campaigns and audits are continuing
throughout the Group`s operations.
At Blyvoor, muffling of drilling machines and silencing of fans have been
completed. The mine`s first `fogger` system for improved dust control at
underground tips has been installed on 38 level, and additional
installations have been scheduled.
During the quarter, the Group spent a total of R9.6 million on
environmental management issues.
Public debate on the rising levels of acidic water in underground cavities
below Johannesburg, escalated in recent weeks. DRDGOLD has for some time
now played a proactive role in finding a permanent and self-sustainable
solution for this issue. We have posted on our website (www.drdgold.com) a
clear summary on the position we hold and our continued role in the matter.
Production
Total gold production for the quarter was 1% lower at 61 632oz, reflecting
lower total gold production from Blyvoor (see below). Gold sold was 8%
lower at 57 293oz, due to 4 340oz of gold produced during the quarter but
not yet sold by Rand Refinery Limited at quarter-end.
Total gold production for the year was 3% lower at 241 194oz. This was as a
consequence of lower total gold production for the year from Blyvoor,
reflecting the continuing volume recovery from the seismic damage caused to
high-grade underground production areas towards the end of the previous
financial year and the wage strike which lasted almost a month.
Reserves and resources
Attributable mineral reserves increased by 21% to 7.3Moz in FY2010. This
increase was as a result of the higher gold price used in the mineral
reserve calculation together with the expected increase in Crown`s
deposition capacity as a consequence of the construction of the Crown/Ergo
pipeline linking Crown to Ergo`s Brakpan deposition site. Attributable
mineral resources increased by 6% to 60.0Moz.
The FY2010 reserve and resource information was prepared in compliance with
the SAMREC Code by DRDGOLD`s designated competent persons Mr R. Botha and
Mr V. Labuschagne, who are both employees of DRDGOLD.
Financial
Total revenue for the quarter was less than 1% lower at R521.7 million. An
8% increase in the average Rand gold price received to R292 769/kg offset
the impact of slightly lower gold production. After accounting for total
cash operating costs, 9% higher at R468.4 million due mainly to the
increase in power costs (see below), total operating profit was 6% lower at
R91.5 million. On-going de-risking of the business during the quarter saw
the transfer of environmental rehabilitation liabilities in respect of
mining rights over the old Durban Roodepoort Deep and West Wits mining
licence areas which were disposed of. This reduced the provision for
environmental rehabilitation and a consequent credit of R110.9 million
increased gross profit by more than 300% to R144.2 million.
The voluntary liquidation of offshore subsidiaries, which were previously
the holding companies for various offshore operations, resulted in the
foreign translation reserve accumulated over the life of these subsidiaries
to be realised as part of the profit on the disposal of subsidiaries and
joint venture of R158.2 million. This, together with a reduction in post-
retirement employee provisions reported under administration and other
general costs, resulted in profit before tax of R290.9 million. After
accounting for a deferred tax expense of R55.4 million, net profit after
tax was R247.9 million compared with the previous quarter`s R12.3 million.
Total revenue for the year was 4% higher than in the previous year at R1
990.5 million due to a 7% increase in the average Rand gold price received
for the year to R267 292/kg. Total operating profit, however, was 4% lower
at R271.6 million due to a 7% increase in total cash operating costs to R1
748.8 million. After accounting for higher depreciation, an environmental
rehabilitation provision credit and lower retrenchment costs, gross profit
from operating activities was 15% higher at R148.7 million. Lower
administration expenses and general costs and the afore-mentioned profit on
the sale of subsidiaries and joint venture contributed to a 157% increase
in profit before tax to R211.6 million. Net profit after tax was 84% higher
at R203.3 million.
Exploration and prospecting
In Zimbabwe, the number of claims at Leny has been increased from 16
(covering 253ha) to 46 (covering 454ha). A magnetic survey has been
completed in a 50mx50m grid and an induced polarisation survey is currently
under way across the entire area of the claims.
Anomalies from these surveys will be used to plan a drilling programme. So
far, three target areas have been identified and a drill rig is on site to
start the first phase of core drilling.
Some plant and equipment for gold recovery during the exploration phase has
been delivered to site and regulatory approval of a site of works plan, an
environmental plan and water rights are pending. To date we have spent a
total of R5.2 million on this project.
At Blyvoor, exploration and cover drilling during the quarter under review
amounted to 743m.
At Crown, follow-up drilling was done at the 4L2 dump (63 holes) and the
3L42 dump (24 holes). Results confirmed previous grade estimates. Other
drilling completed was at Top Star (for the verification of the
embankments) and in the southern portion of the 3A2 dump (to confirm
grades).
At Ergo, 19 holes were drilled and face sampling at 50m intervals completed
on the Elsburg Tailings Complex`s 4A48 dump. Results from some 580 samples
confirmed the previous valuation, indicating results higher than those
achieved in plant sampling.
Corporate activity
During the year, agreement was reached with Mintails SA (Pty) Limited
("Mintails") for the Group to acquire Mintails` 50% stake in Ergo Mining
(Pty) Limited (also known as the Ergo Joint Venture) for R82 million (R62
million in cash and the balance in shares in the Witfontein tailings
deposition site on the Far West Rand valued at R20 million).
Detailed operating and financial review
Blyvoor
Total gold production was 7% lower at 26 685oz, reflecting a 2% decrease in
underground gold production and a 23% decrease in surface gold production
Underground throughput rose 11% to 185 000t while the average underground
yield declined 12% to 3.54g/t, both a consequence of higher volumes mined
at the lower-grade No 4 and 6 shafts. Volume recovery at the higher grade
No 5 Shaft, damaged by seismic activity in the previous financial year,
continues.
Lower surface gold production resulted from a 30% decline in the average
surface yield to 0.23g/t, reflecting continued reclamation from the lower-
grade No 4 Dam. Surface throughput rose by 8% to 755 000t.
Total cash operating unit costs increased by 24% to R293 034/kg due both to
lower gold production and to a R14.1 million increase in power costs, R7.1
million of which was attributable to Eskom`s 25% price increase and the
balance to its higher winter tariff. Underground cash operating costs were
19% higher at R333 986/kg and surface cash operating costs 39% higher at
R140 858/kg.
Operating profit was down substantially from the previous quarter`s R29.3
million at R4.6 million due to lower gold production and to higher costs.
Capital expenditure, 13% higher at R19.6 million, was directed towards
continuing opening up and development, and towards completion of an upgrade
to the refrigeration plant to accommodate the extension of the underground
mining footprint westward.
Crown
The Cason surface retreatment operation of East Rand Proprietary Mines
Limited ("ERPM") has been incorporated, for reporting purposes, into Crown
with effect from the start of the quarter under review. For comparative
purposes, the results of the two entities for the previous quarter have
been combined.
Total gold production for the quarter was 1% higher at 24 081oz due to a 6%
increase in total throughput to 1 760 000t. The average yield was 4% lower
at 0.43g/t.
Cash operating unit costs were 3% higher at R211 216/kg, reflecting the
impact of Eskom`s 25% price increase and higher winter tariff. Operating
profit increased by 9%, due mainly to a higher average Rand gold price
received.
Capital expenditure, significantly higher at R34 million, was directed
towards long-lead items required for the new, 50km pipeline linking Crown`s
Crown and City Deep plants with Ergo. Construction is under way and
scheduled for completion by August 2011 (see below).
Ergo
Gold production rose by 11% to 10 866oz, reflecting a 4% increase in
throughput to 3 269 000t. The average yield was maintained at 0.10g/t.
Cash operating unit costs were 10% lower at R198 118/kg due to higher gold
production. Operating profit was 85% higher, a consequence both of the
increase in gold production and in the average Rand gold price received.
Capital expenditure, 13% higher at R11.4 million, covered ongoing
rehabilitation work at the Brakpan tailings deposition site and final
infrastructure required to increase maximum throughput from the Elsburg
Tailings Complex to 1.2Mtpm.
Dividend
The directors have declared a final dividend of 5 South African cents per
ordinary share for the year ended 30 June 2010, which amounts to a total
final dividend payout of R19.2 million. The dividend is declared in the
currency of the Republic of South Africa.
In compliance with the requirements of Strate, given the company`s primary
listing on the JSE Limited, the salient dates for payment of the dividend
are as follow:
2010
Last date to trade ordinary shares cum dividend Friday, 1 October
Ordinary shares trade ex dividend Monday, 4 October
Record date Friday, 8 October
Payment date Monday, 11 October
On payment date, dividends due to holders of certificated securities on the
South African share register will either be electronically transferred to
the shareholders` bank accounts or, in the absence of suitable mandates,
dividend cheques will be posted to such shareholders.
Dividends in respect of dematerialised shareholdings will be credited to
shareholders` accounts with the relevant CSDP or broker.
To comply with the further requirements of Strate, between Monday, 4
October 2010 and Friday 8 October 2010, both days inclusive, no transfers
between the South African and any other share register will be permitted
and no ordinary shares pertaining to the South African share register may
be dematerialised or rematerialised.
The currency conversion date for the Australian and United Kingdom
registers will be Monday, 11 October 2010.
To holders of American Depository Shares
Each American Depository Share ("ADS") represents ten ordinary shares
2010
ADSs trade ex dividend on Nasdaq Wednesday, 6 October
Record date Friday, 8 October
Approximate date for currency conversion Friday, 15 October
Approximate payment date of dividend Monday, 25 October
Assuming an exchange rate of R7.33/$1, the dividend payable on an ADS is
equivalent to 6.82 US cents. However, the actual rate of payment will
depend on the exchange rate on the date for currency conversion.
Looking ahead
Blyvoor underground is now, for the first time in years, consistently
hitting 70,000 underground reef tonnes per month. Our focus will be on
further improving key sustainability drivers - enhanced optionality through
increased opening up and development and creating more face-length,
maintaining current trending in employee efficiency (per capita output) and
managing the ore mix carefully so as to reduce our reliance on high grade
areas.
The Crown/Ergo pipeline now under construction, by providing two of Crown`s
plants with access to Ergo`s Brakpan deposition site, will allow Crown to
restore its maximum deposition capacity to 600 000tpm. Crown`s deposition
capacity was reduced to 400 000tpm in the previous financial year due to
capacity constraints at its Nasrec deposition site. Restored deposition
capacity provides the operation with the opportunity to bring to account
potential new resources on the Western and Central Witwatersrand, thus
increasing production and extending its life.
At Ergo, in the short- to medium-term at least, the plan is to maintain
steady volumes and beat cost targets. With these delivering healthy
margins, we can look longer-term to improvements in recovered grade from on-
going pilot plant work and other research and development initiatives.
In Zimbabwe, where DRDGOLD is a 50% partner with Zimbabwe-owned Chizim
Investments (Pvt) Limited in a new gold exploration and mining company to
be known as Chizim Gold (Pvt) Limited, exploration will continue at current
levels of investment.
Niel Pretorius
Chief Executive Officer
NOTE REGARDING FINANCIAL INFORMATION
The condensed preliminary consolidated financial statements below have been
prepared in accordance with International Financial Reporting Standards
("IFRSs"), AC 500 Standards as issued by the Accounting Practices Board,
Schedule 4 of the Companies Act and the disclosure requirements of
International Accounting Standards 34, which is consistent with the
accounting policies used in the audited annual financial statements for the
year ended 30 June 2009.
KPMG`s unmodified review report on the condensed annual consolidated
financial statements, prepared in accordance with IFRS, is available for
inspection at the Group`s registered office.
CONDENSED CONSOLIDATED Quarter Quarter Quarter
Statement of comprehensive Jun 10 Mar 10 Jun 09
income R m R m R m
Unaudited Unaudited Unaudited
Gold and silver revenue 521.7 524.0 420.7
Net operating costs (430.2) (427.1) (419.4)
Cash operating costs (468.4) (429.7) (423.2)
Movement in gold in process 38.2 2.6 3.8
Operating profit 91.5 96.9 1.3
Depreciation (57.7) (45.2) (41.6)
Movement in provision for
environmental rehabilitation 110.9 (14.6) (6.2)
Retrenchment costs (0.5) (0.3) (1.4)
Gross profit/(loss) from operating
activities 144.2 36.8 (47.9)
Impairments (6.2) - (19.4)
Administration expenses and
general costs (12.0) (34.1) (56.5)
Share-based payments (0.6) (1.2) (1.7)
Net gain/(loss) on financial
liabilities measured at amortised
cost (note 1) 6.2 - (8.8)
Recognition of goodwill on purchase
of subsidiary - - 53.0
Profit on disposal of assets 0.9 11.1 -
Profit on disposal of subsidiaries
and joint venture (note 2) 158.2 - -
Finance income 7.4 5.5 3.3
Finance expenses (7.2) (0.5) (3.2)
Profit/(loss) before taxation 290.9 17.6 (81.2)
Income tax 12.4 (8.2) 3.2
Deferred tax (55.4) 2.9 120.6
Profit for the period 247.9 12.3 42.6
Attributable to:
Equity owners of the parent 240.9 9.9 37.2
Non-controlling interest 7.0 2.4 5.4
247.9 12.3 42.6
Other comprehensive income
Foreign exchange translation (note 2)(156.8) - 10.0
Purchase of subsidiaries and other - - 192.9
Mark to market of available for
sale investments 5.2 - (1.1)
Total comprehensive income
for the period 96.3 12.3 244.4
Attributable to:
Equity owners of the parent 88.0 9.9 179.3
Non-controlling interest 8.3 2.4 65.1
96.3 12.3 244.4
Reconciliation of headline earnings/(loss)
Profit 240.9 9.9 37.2
Adjusted for:
Impairments 6.2 - 19.4
Goodwill on purchase of subsidiary - - (53.0)
Profit on disposal of assets (0.9) (11.1) -
Profit on disposal of subsidiaries
and joint venture (158.2) - -
Non-controlling interest in
headline earnings adjustment 3.5 2.8 (4.4)
Headline earnings/(loss) 91.5 1.6 (0.8)
Headline earnings/(loss)
per share-cents 23.9 0.4 (0.2)
Basic earnings per share-cents 63.0 2.6 9.8
Diluted headline earnings/(loss) per
share-cents 23.9 0.4 (0.2)
Diluted basic earnings per
share - cents 63.0 2.6 9.8
Calculated on the weighted average
ordinary shares issued of 382 569 557 380 987 431 377 733 911
Adjusted headline earnings per
share - cents 22.3 0.4 2.1
(Adjusted for the net gain/(loss) on financial liabilities measures at
amortised costs - note 1)
Note: From time to time DRDGOLD may publicly disclose certain "Non-GAAP"
financial measures in the course of its financial presentation release,
earnings conference calls and otherwise.
CONDENSED CONSOLIDATED 12 Months to 12 Months to
Statement of comprehensive Jun 10 Jun 09
income R m R m
Reviewed Reviewed
Gold and silver revenue 1 990.5 1 910.7
Net operating costs (1 718.9) (1 628.0)
Cash operating costs (1 748.8) (1 635.0)
Movement in gold in process 29.9 7.0
Operating profit 271.6 282.7
Depreciation (190.8) (99.2)
Movement in provision for
environmental rehabilitation 88.0 (19.5)
Retrenchment costs (20.1) (34.9)
Gross profit from operating activities 148.7 129.1
Impairments (6.2) (75.1)
Administration expenses and general costs (116.6) (138.3)
Share-based payments (4.1) (7.9)
Net gain on financial liabilities
measured at amortised cost (note 1) 6.2 44.0
Recognition of goodwill on purchase
of subsidiary - 53.0
Profit on disposal of assets 13.7 8.3
Profit on disposal of subsidiaries and
joint venture (note 2) 158.2 -
Finance income 27.4 82.5
Finance expenses (15.7) (13.3)
Profit before taxation 211.6 82.3
Income tax (10.3) (46.2)
Deferred tax 2.0 74.6
Profit for the period 203.3 110.7
Attributable to:
Equity owners of the parent 207.8 129.1
Non-controlling interest (4.5) (18.4)
203.3 110.7
Other comprehensive income
Foreign exchange translation (note 2) (156.5) (0.6)
Purchase of subsidiary and other - 192.9
Mark to market of available for sale investments 5.2 (1.1)
Total comprehensive income for the period 52.0 301.9
Attributable to:
Equity owners of the parent 55.2 260.6
Non-controlling interest (3.2) 41.3
52.0 301.9
Reconciliation of headline earnings
Profit 207.8 129.1
Adjusted for:
Impairments 6.2 75.1
Goodwill on purchase of subsidiary - (53.0)
Profit on disposal of assets (13.7) (8.3)
Profit on the disposal of subsidiaries
and joint venture (158.2) -
Non-controlling interest in headline earnings
adjustment 6.8 (15.5)
Headline earnings 48.9 127.4
Headline earnings per share-cents 12.9 33.8
Basic earnings per share-cents 54.6 34.3
Diluted headline earnings per share-cents 12.9 33.8
Diluted basic earnings per share-cents 54.6 34.3
Calculated on the weighted average
ordinary shares issued of 380 407 239 376 678 974
Adjusted headline earnings per
share - cents 11.2 22.1
(Adjusted for the net gain on financial liabilities measures at amortised
costs - note 1)
Note- From time to time DRDGOLD may publicly disclose certain "Non-GAAP"
financial measures in the course of its financial presentation release,
earnings conference calls and otherwise.
CONDENSED CONSOLIDATED As at As at As at
Statement of financial 30 Jun 10 31 Mar 10 30 Jun 09
position Rm Rm Rm
Reviewed Unaudited Reviewed
Assets
Property, plant and equipment(note 3)1 863.2 1 730.7 1 737.5
Non-current investments and
other assets 48.1 43.0 43.0
Environmental rehabilitation
trusts funds 126.1 141.4 129.7
Deferred tax asset 140.7 200.3 165.1
Current assets 409.4 464.3 550.5
Inventories 132.6 98.0 93.9
Trade and other receivables 73.6 150.0 88.0
Cash and cash equivalents 188.2 201.3 353.6
Assets classified as held for sale 15.0 15.0 15.0
Total assets 2 587.5 2 579.7 2 625.8
Equity and Liabilities
Equity 1 649.9 1 539.7 1 584.0
Equity of the owners of the parent 1 550.6 1 448.7 1 481.5
Non-controlling interest 99.3 91.0 102.5
Loans and borrowings 59.0 65.1 65.1
Post retirement and other
employee benefits (note 4) 13.4 43.4 43.6
Provision for environmental
rehabilitation (note 5) 420.6 440.4 412.5
Deferred tax liability 168.1 172.4 194.6
Current liabilities 276.5 318.7 326.0
Trade and other payables 276.5 268.7 323.9
Loans and borrowings - 50.0 2.1
Total equity and liabilities 2 587.5 2 579.7 2 625.8
CONDENSED Quarter Quarter Quarter
Statement of changes in equity Jun 10 Mar 10 Jun 09
Rm Rm Rm
Unaudited Unaudited Unaudited
Balance at the beginning of
the period 1 539.7 1 525.9 1 335.7
Share capital issued 13.3 0.3 2.2
for acquisition finance and cash 14.3 - 2.2
for share options exercised - 0.2 -
for costs (1.0) 0.1 -
Increase in share-based
payment reserve 0.6 1.2 1.7
Profit attributable to the
equity owners of the parent 240.9 9.9 37.2
Profit attributable to the
non-controlling interest 7.0 2.4 5.4
Other comprehensive income (151.6) - 201.8
Balance as at the end of the
period 1 649.9 1 539.7 1 584.0
CONDENSED 12 months 12 months
Statement of changes in equity 30 Jun 10 30 Jun 09
Rm Rm
Reviewed Reviewed
Balance at the beginning of the period 1 584.0 1 305.5
Share capital issued 28.8 6.3
for acquisition finance and cash 29.8 -
for share options exercised 1.1 6.7
for costs (2.1) (0.4)
Increase in share-based payment reserve 4.1 7.9
Profit attributable to the equity owners
of the parent 207.8 129.1
Loss attributable to non-controlling interest (4.5) (18.4)
Dividends paid (19.0) (37.6)
Other comprehensive income (151.3) 191.2
Balance as at the end of the period 1 649.9 1 584.0
CONDENSED CONSOLIDATED Quarter Quarter Quarter
Statement of cash flows Jun 10 Mar 10 Jun 09
Rm Rm Rm
Unaudited Unaudited Unaudited
Net cash inflow from operations 154.1 8.3 39.5
Net cash outflow from
investing activities (111.1) (20.2) (377.3)
Net cash (out)/in flow from
financing activities (55.2) 50.1 156.0
(Decrease)/increase in cash and
cash equivalents (12.2) 38.2 (181.8)
Translation adjustment (0.9) 0.3 (10.3)
Opening cash and cash equivalents 201.3 162.8 545.7
Closing cash and cash equivalents 188.2 201.3 353.6
Reconciliation of net cash inflow from operations
Profit/(loss) before taxation 290.9 17.6 (81.2)
Adjusted for:
Movement in gold process (38.2) (2.6) (3.8)
Depreciation and impairments 63.9 45.2 61.0
Movement in provision for
environmental rehabilitation (110.9) 14.6 6.2
Share-based payments 0.6 1.2 1.7
Net (gain)/loss on financial liabilities
measured at amortised cost (6.2) - 8.8
Profit on disposal of assets (0.9) (11.1) -
Recognition of goodwill on
purchase of subsidiary - - (53.0)
Profit on disposal of subsidiaries
and joint venture (158.2) - -
Finance expenses and unwinding of
provisions 4.8 0.4 3.2
Growth in environmental trust funds (2.4) (2.4) (2.8)
Other non cash items (26.0) (4.8) 38.5
Taxation paid (0.5) - (20.2)
Working capital changes 137.2 (49.8) 81.1
Net cash inflow from operations 154.1 8.3 39.5
CONDENSED CONSOLIDATED 12 months 12 months
Statement of cash flows 30 Jun 10 30 Jun 09
Rm Rm
Reviewed Reviewed
Net cash inflow from operations 53.6 208.4
Net cash outflow from investing activities (226.4) (593.3)
Net cash in/(out)flow from financing activities 7.8 (85.8)
Decrease in cash and cash equivalents (165.0) (470.7)
Translation adjustment (0.4) (21.8)
Opening cash and cash equivalents 353.6 846.1
Closing cash and cash equivalents 188.2 353.6
Reconciliation of net cash inflow from operations
Profit before taxation 211.6 82.3
Adjusted for:
Movement in gold process (29.9) (7.0)
Depreciation and impairments 197.0 174.3
Movement in provision for
environmental rehabilitation (88.0) 19.5
Share-based payments 4.1 7.9
Net gain on financial instruments measured
at amortised cost (6.2) (44.0)
Profit on disposal of assets (13.7) (8.3)
Recognition of goodwill on purchase
of subsidiary - (53.0)
Profit on disposal of subsidiaries and
joint venture (158.2) -
Finance expenses and unwinding of provisions 10.8 9.8
Growth in environmental trust funds (9.5) (12.9)
Other non cash items (25.3) 42.7
Taxation paid (12.6) (46.9)
Working capital changes (26.5) 44.0
Net cash inflow from operations 53.6 208.4
NOTES TO FINANCIAL STATEMENTS
1. Net gain/(loss) on financial liabilities measured at amortised cost
The net gain/(loss) on financial liabilities measured at amortised cost in
the statement of comprehensive income comprises the expected cash flows of
the preference shares issued to Khumo Gold SPV (Pty) Ltd and the DRDSA
Empowerment Trust. These preference shares are re-assessed on a quarterly
basis and based on the expected future cash flows from DRDGOLD South
African Operations (Pty) Limited.
2. Profit on disposal of subsidiaries and joint venture
All DRDGOLD`s foreign subsidiaries, which were holding companies for
DRDGOLD`s foreign operations have been voluntarily placed into liquidation
as at 30 June 2010. A foreign currency translation reserve has accumulated
over the life of these foreign subsidiaries. The voluntary liquidation
constitutes a disposal and therefore, any accumulated foreign currency
translation reserves have been realised in profit and loss.
Also included in the amount of R158.2 million is a R1.5 million profit
realised on the disposal of DRDGOLD`s 50% interest in Witfontein Mining
(Pty) Limited.
3. Asset acquisition of subsidiary
On 21 January 2010 DRDGOLD signed an agreement to acquire, subject to
certain suspensive conditions including Competition Commission approval,
Mintails` remaining 50% interest in Ergo for a total consideration of R82.1
million; R62.1 million to be settled in cash and the balance in shares in
the Witfontein tailings deposition site on the Far West Rand valued at R20
million. On 15 April 2010 Competition Commission approval was obtained and
Ergo has been consolidated effective 1 May 2010.The transaction has been
treated for accounting purposes as the acquisition of an asset, or group of
assets.
4. Post-retirement and other employee benefits
As a result of a project initiated during the year to optimise the
synergies of our surface retreatment operations and the resulting
possibility of a settlement of existing post retirement medical benefits we
have revised some of the assumptions used in the calculation of this
provision. The resulting decrease in the provision for post retirement
medical benefits of approximately R30 million has been treated for
accounting purposes as a change in estimate and is included under
administration expenses and general costs.
5. Provision for environmental rehabilitation
The provision for environmental rehabilitation has decreased mainly as a
result of the disposal of the old Durban Roodepoort Deep and West Wits
mining licenses. The environmental rehabilitation liability transfers along
with these mining licenses.
KEY OPERATING AND FINANCIAL RESULTS (Unaudited)
METRIC/ZAR Blyvoor Crown* Ergo** Total
Ore milled (`000t)
Underground Jun 10 Qtr 185 - - 185
Mar 10 Qtr 166 - - 166
YTD Jun 10 633 - - 633
Surface Jun 10 Qtr 755 1 760 3 269 5 784
Mar 10 Qtr 701 1 656 3 150 5 507
YTD Jun 10 2 968 7 122 11 867 21 957
Total Jun 10 Qtr 940 1 760 3 269 5 969
Mar 10 Qtr 867 1 656 3 150 5 673
YTD Jun 10 3 601 7 122 11 867 22 590
Yield (g/t)
Underground Jun 10 Qtr 3.54 - - 3.54
Mar 10 Qtr 4.01 - - 4.01
YTD Jun 10 3.79 - - 3.79
Surface Jun 10 Qtr 0.23 0.43 0.10 0.22
Mar 10 Qtr 0.33 0.45 0.10 0.23
YTD Jun 10 0.31 0.43 0.09 0.23
Total Jun 10 Qtr 0.88 0.43 0.10 0.32
Mar 10 Qtr 1.03 0.45 0.10 0.34
YTD Jun 10 0.92 0.43 0.09 0.33
Gold Produced (kg)
Underground Jun 10 Qtr 654 - - 654
Mar 10 Qtr 666 - - 666
YTD Jun 10 2 402 - - 2 402
Surface Jun 10 Qtr 176 749 338 1 263
Mar 10 Qtr 228 743 304 1 275
YTD Jun 10 909 3 092 1 099 5 100
Total Jun 10 Qtr 830 749 338 1 917
Mar 10 Qtr 894 743 304 1 941
YTD Jun 10 3 311 3 092 1 099 7 502
Cash operating costs (ZAR per kg)
Underground Jun 10 Qtr 333 986 - - 333 986
Mar 10 Qtr 281 818 - - 281 818
YTD Jun 10 324 736 - - 324 736
Surface Jun 10 Qtr 140 858 211 216 198 118 197 907
Mar 10 Qtr 101 539 204 349 220 609 189 841
YTD Jun 10 108 771 199 135 231 294 189 959
Total Jun 10 Qtr 293 034 211 216 198 118 244 331
Mar 10 Qtr 235 841 204 349 220 609 221 400
YTD Jun 10 265 445 199 135 231 294 233 112
Cash operating costs (ZAR per tonne)
Underground Jun 10 Qtr 1 181 - - 1 181
Mar 10 Qtr 1 131 - - 1 131
YTD Jun 10 1 232 - - 1 232
Surface Jun 10 Qtr 33 90 20 43
Mar 10 Qtr 33 92 21 44
YTD Jun 10 33 86 21 44
Total Jun 10 Qtr 259 90 20 78
Mar 10 Qtr 243 92 21 76
YTD Jun 10 244 86 21 77
Gold and silver revenue (ZAR million)
Jun 10 Qtr 217.0 215.3 89.4 521.7
Mar 10 Qtr 241.8 200.2 82.0 524.0
YTD Jun 10 861.4 834.8 294.3 1 990.5
Operating profit (ZAR million)
Jun 10 Qtr 4.6 55.1 31.8 91.5
Mar 10 Qtr 29.3 50.4 17.2 96.9
YTD Jun 10 16.3 210.0 45.3 271.6
Capital expenditure (ZAR million)
Jun 10 Qtr 19.6 34.0 11.4 65.0
Mar 10 Qtr 17.4 3.4 10.1 30.9
YTD Jun 10 79.6 45.8 62.2 187.6
IMPERIAL/US$
Gold Produced (oz)
Underground Jun 10 Qtr 21 027 - - 21 027
Mar 10 Qtr 21 412 - - 21 412
YTD Jun 10 77 226 - - 77 226
Surface Jun 10 Qtr 5 658 24 081 10 866 40 605
Mar 10 Qtr 7 331 23 888 9 773 40 992
YTD Jun 10 29 226 99 410 35 332 163 968
Total Jun 10 Qtr 26 685 24 081 10 866 61 632
Mar 10 Qtr 28 743 23 888 9 773 62 404
YTD Jun 10 106 452 99 410 35 332 241 194
Cash operating costs (US$ per oz)
Underground Jun 10 Qtr 1 373 - - 1 373
Mar 10 Qtr 1 163 - - 1 163
YTD Jun 10 1 327 - - 1 327
Surface Jun 10 Qtr 580 869 815 814
Mar 10 Qtr 419 843 909 783
YTD Jun 10 444 814 945 776
Total Jun 10 Qtr 1 204 869 815 1 004
Mar 10 Qtr 973 843 909 913
YTD Jun 10 1 085 814 945 953
Gold and silver revenue (US$ million)
Jun 10 Qtr 28.7 28.4 11.8 68.9
Mar 10 Qtr 32.0 26.6 10.9 69.5
YTD Jun 10 113.2 109.6 38.7 261.5
Operating profit(US$ million)
Jun 10 Qtr 0.6 7.3 4.2 12.1
Mar 10 Qtr 3.8 6.7 2.2 12.7
YTD Jun 10 2.1 27.6 6.0 35.7
Cash expenditure (US$ million)
Jun 10 Qtr 2.6 4.4 1.5 8.5
Mar 10 Qtr 2.4 0.5 0.9 3.8
YTD Jun 10 10.5 6.0 8.2 24.7
The disclosures of the different operations will also form the basis on
which the operating segments will be disclosed in the annual report in
accordance with IFRS 8 (Operating Segments).
CASH OPERATING COSTS RECONCILIATION
CONTINUING OPERATIONS (R000 unless otherwise stated)
Blyvoor Crown* Ergo** Total
Total cash costs
Jun 10 Qtr 218 875 143 931 65 172 427 978
Mar 10 Qtr 204 910 156 589 67 580 429 079
YTD Jun 10 870 947 637 789 264 047 1772 783
Movement in gold in process
Jun 10 Qtr 30 894 (1 997) 9 326 38 223
Mar 10 Qtr (1 691) 2 035 2 238 2 582
YTD Jun 10 33 767 (9 040) 5 215 29 942
Less: Production taxes, rehabilitation and other
Jun 10 Qtr 2 150 (22 808) 6 931 (13 727)
Mar 10 Qtr (11 980) 2 389 2 591 (7 000)
YTD Jun 10 (4 772) (6 729) 13 706 2 205
Less: Retrenchment costs
Jun 10 Qtr (768) - - (768)
Mar 10 Qtr 25 - - 25
YTD Jun 10 10 925 - - 10 925
Less: Corporate and general administration costs
Jun 10 Qtr 5 169 6 541 603 12 313
Mar 10 Qtr 4 332 4 404 162 8 898
YTD Jun 10 19 673 19 752 1 364 40 789
Cash operating costs
Jun 10 Qtr 243 218 158 201 66 964 468 383
Mar 10 Qtr 210 842 151 831 67 065 429 738
YTD Jun 10 878 888 615 726 254 192 1748 806
Gold produced (kg)
Jun 10 Qtr 830 749 338 1 917
Mar 10 Qtr 894 743 304 1 941
YTD Jun 10 3 311 3 092 1 099 7 502
Total cash operating costs (R/kg)
Jun 10 Qtr 293 034 211 216 198 118 244 331
Mar 10 Qtr 235 841 204 349 220 609 221 400
YTD Jun 10 265 445 199 135 231 294 233 112
Total cash operating costs (US$/oz)
Jun 10 Qtr 1 204 869 815 1 004
Mar 10 Qtr 973 843 909 913
YTD Jun 10 1 085 814 945 953
* Crown include ERPM`s Cason surface retreatment operation.
** With effect from 1 May 2010, ErgoGold represents DRDGOLD`s 100% share of
the Elsburg Joint Venture and 100% in the Ergo Joint Venture.
DIRECTORS - (*British)(**American)
Executive:
DJ (Niel) Pretorius (Chief Executive Officer)
CC Barnes (Chief Financial Officer)
Non-executives:
J Turk **
Independent non-executives:
GC Campbell*(Non-Executive Chairman); RP Hume; EA Jeneker
Company Secretary:
TJ Gwebu
INVESTOR RELATIONS
For further information, contact Niel Pretorius at:
Tel: (+27)(0)11 470 2600, Fax: (+27) (0)11 470 2618,
website: http://www.drdgold.com
Quadrum Office Park, 50 Constantia Boulevard,
Constantia Kloof Ext 28, South Africa.
PO Box 390,
Maraisburg, 1700,
South Africa.
Roodepoort
26 August 2010
JSE LIMITED SPONSOR
One Capital
Date: 26/08/2010 08:41:30 Supplied by www.sharenet.co.za
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