SA’s leading gold tailings retreatment specialist, DRDGold, says higher sales volumes helped offset pressure from increased electricity and labour costs in its first-quarter ending September, when core profit rose 16% from the prior three months.
Gold production increased 7% from the previous quarter to 1,449kg primarily due to an 8% increase in yield, the group said in an update, with earnings before interest, taxation, depreciation and amortisation (ebitda), or core profit, growing 16% to R350.8m.
Though increases in electricity and labour costs with effect from July resulted in higher cash operating costs, the increase in the number of gold units produced and sold resulted in a 5% decrease in cash operating costs to R566,317/kg, the group said.
The average gold price received rose 2% to R839,983/kg, while the cash operating cost per tonne of material processed increased 6% to R114/t.
Gold prices were bolstered in 2020 as Covid-19 prompted investors to look to safer assets such as precious metals, and debt-free DRDGold ended its 2021 year with a cash pile of R2.2bn.
This has since fallen to R1.9bn, largely due to the payment of a R345m final dividend for the group’s 2021 year.
In morning trade on Monday, DRDGold’s shares were trading 0.36% higher at R13.93, while the JSE’s precious metals and mining index was down 0.83%.
DRDGold’s shares have risen by more than three-quarters since the beginning of 2020, giving the group a market value of R11.8bn.
Update: October 25 2021
This article has been updated with additional information.
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