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Johannesburg - South African gold miner DRDGold on Friday reported a 30% increase in headline earnings per share to 13.6c in the December quarter from 10.5c in the quarter before.
Production fell 15% to 60 057 ounces in the December quarter from 70 861 ounces the prior quarter but this was offset by an 18% increase in the average gold price received to 255 213 rand per kilogramme and a 2% decrease in cash operating costs to R406.9m in the quarter.
Net profit swung from an R8.8m loss in the September quarter to a profit of R33.4m in the December quarter while operating profit grew 65% to R94.3m.
The company said lower gold production was mainly due to a 45% drop in production at ERPM, the result of a decision to suspend underground mining with effect from the end of October 2008.
At Blyvoor, overall underground and surface milling rates and grades were largely unchanged but underground production was affected by a slower than expected return to normal operations following the September quarter's operational safety closures.
This was largely offset by improved grades of surface material as processing moved to the lower levels of the main tailings dam where grades are characteristically higher.
Throughput at the company's Crown operations was reduced by 26% to 1 531 000 tonnes mainly as a result of the diminished capacity of the Crown tailings complex and a one-month delay in starting up the Top Star reclamation site.
At the Ergo JV, the company commissioning of the first carbon in leach circuit at the Brakpan plant on schedule during the December quarter and the project is targeting a throughput of 600 000 tonnes per month by April 2009.
"Ergo is coming to fruition now and should therefore benefit from the higher gold price. We are also pleased that the Top Star project is finally up and running, to take advantage of the current gold price trend," said newly appointed CEO Niel Pretorius.
Looking ahead Pretorius said uncertain times might continue to provide the 'safe haven' attraction of gold.
"With the global liquidity squeeze, we will remain cautious of long lead capital projects, and avoid projects that we cannot fully cover with the cash and facilities that we have at hand," he said, adding that DRDGold will be taking a "very disciplined approach to growth".
- I-Net Bridge