Shares in DRDGold rose the most in four weeks in intraday trade on Friday after the company reported higher earnings despite lower output in the quarter ending March 31.
Adjusted earnings before interest, taxes, depreciation and amortisation (ebitda) increased 12% from the previous quarter to R494.5m “primarily due to an increased gold price received”, the gold miner said in a statement.
However, gold production was 3% lower than the previous quarter, though the yield rose marginally higher.
An average gold price of $2,071/oz was realised in the reporting quarter, up from the $1,979/oz in the previous comparable period.
DRDGold said it may fall marginally short of the production guidance it made in its interim results published in mid-February, due to “new reclamation sites commencing production later than planned”. As a result, it may marginally exceed the revised cash operating unit cost guidance of R800,000/kg.
For the six months to end-December, the company paid an interim cash dividend totalling R172.3, leaving cash and cash equivalents up by R56.1m to R1.585.5bn for the latest reporting quarter. The cash will be allocated to the company’s extended capital expenditure programme for the remainder of the financial year to end-June.
The miner announced that the “long-awaited” 4L3 and 5L27 sites at Ergo Mining were finally commissioned during the latter half of January, which the company described as an “important development”.
By December, Ergo had depleted the clean-up and legacy sites from where it reclaimed material to supplement the shortfall in planned throughput while awaiting regulatory approval and addressing community disruption during the preceding months, DRDGold said.
It said throughput for the quarter was 4% lower than the previous quarter, largely due to a poor January. However, this was reversed after commissioning, with a strong finish toward the end of March.
“With production tracking positively and barring any unforeseen events”, the company said it remained in a favourable position to consider declaring a final cash dividend in August.
DRDGold shares closed 2.01% higher at R16.27, giving the company a market cap of just over R14bn.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.