DRDGold yesterday, reporting that for the quarter ended March 31, 2023, production increased by 4% due to a higher yield per ton of gold, said that due to favourable conditions, it expects to post a final cash dividend in August.
The share price rose after the announcement in early trade to a high of R24.42, up nearly 4%, having closed at R23.50 on Friday.
In its operating update for the quarter ended March 31, 2023, the gold tailings retreatment group said production rose by 4% to 1329 kg in the reported period as the yield increased to 0.030g per tonne from 0.255g per tonne, which lowered the cash operating costs per kilogram slightly to R691 061 per kg.
The group, which mines gold dumps around Johannesburg, reported a decrease of 2.4% quarter on quarter to 1 289kg.
‘’As a result of the increase in yield, cash operating costs per kilogram of gold sold decreased marginally from the previous quarter to R689 426/kg.
‘’Cash operating costs per tonne of material increased from the previous quarter to R170.3/t due to a decrease in the ore treated, the result of the reclamation of final remnant and clean up material at sites as they near depletion at both operations,’’ the group said.
DRDGold said all-in sustaining costs per kilogram were R790471 a kg, decreasing quarter on quarter mainly due to a decrease in sustaining capital expenditure.
‘’All-in costs per kilogram were R920 965/kg, increasing quarter on quarter mainly due to an increase in non-sustaining capital expenditure, relating primarily to the development of the 20MW solar power plant,’’ it said.
The group said adjusted EBITDA increased by 54% from the previous quarter to R488.5 million, primarily due to an increase in the Rand gold price received.
‘’Cash and cash equivalents increased by R160.2 million to R2 552.4 million as of March 31, 2023, notwithstanding the payment of the interim cash dividend of R172.1 million for the six months ended December 31, 2022,’’ DRDGold said.
DRDGold announced an interim dividend of R172.1m in February.
‘’The cash generated during the current quarter will, inter alia, be applied towards the company’s extended capital expenditure programme for the financial year ending June 30, 2023.
‘’Despite the remaining capital expenditure planned for the current financial year, the company remains in a favourable position to, in the absence of unforeseen events, consider declaring a final cash dividend in or around August 2023,’’ it said.
In its interim results for the six months ended December 31, 2022, DRDGold, which is majority owned by Sibanye-Stillwater, said due to power utility Eskom’s struggles to supply enough electricity, it had processed less ore due to power cuts.
At the time, DRDGold CEO Niël Pretorius said for some time, neglect and corruption had eroded delivery at key state-owned entities, Transnet and Eskom, in particular.
“It seems as though certain elements within the ruling party – desperate to cling to the state’s monopoly on electricity supply – are frustrating efforts to decentralise and privatise power generation,’’ he said.
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