Shares in DRDGold rose the most in about a month after the company reported improved performance across key metrics in the quarter ending September 30, driven by higher gold prices and improved cost efficiency.
Adjusted earnings before interest, taxes, depreciation and amortisation (ebitda) increased 17% from the previous quarter to R680.8m “underpinned by a 2% increase in the average gold price received”, the gold miner said in a statement.
DRDGold is one of the world’s largest gold-tailings retreatment companies. It re-treats existing tailings dams and mine dumps to extract gold.
The company’s financial position strengthened during the quarter, with cash and cash equivalents increasing by R72.7m to R594.2m. This was achieved while the company paid a final cash dividend of R172.3m for the year to end-June and capital expenditure of R323.3m.
Gold production for the quarter rose 7% to 1,319kg (42,407 ounces), driven by a 13% increase in ore milled.
The company said its cost structure showed improvement, with cash operating costs of gold sold decreasing by 4% to R856,723/kg. Additionally, cash operating costs per tonne of material decreased by 6% to R176.
“This reduction was largely due to the decrease in mechanically reclaimed sites, which are more costly to operate compared to hydro mining,” the company said.
DRDGold said its investment in renewable energy was expected to decrease costs further. The impending commissioning of a solar power plant and battery energy storage system would also minimise the company’s environmental footprint.
At 12.55pm, DRDGold’s share price had gained 5.49% to R20.16, its highest level since August last year.
Looking ahead, it said the performance in the first quarter positioned it for continued growth.
“The expected decrease in costs, coupled with the high gold price, will enhance liquidity and support the company's extended capital expenditure programme for the 2025 financial year,” it said.
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