Production drops at DRDGold

Johannesburg - Total gold production at gold producer DRDGold fell by 15% in the December quarter, but the global economic crisis could sustain gold's "safe-haven" appeal and support current gold price levels, said DRDGold CEO Niel Pretorius.

"These uncertain times may continue to provide the safe haven attraction of gold, and support the gold price at its current high levels," said the newly-appointed Pretorius, in commentary accompanying the company's interim report for the six months to end-December 2008.

Quarter-on-quarter production was down from 70 861 ounces (oz) in September 2008 to 60 057oz for the quarter to end-December 2008. Total gold production fell as a result of the company suspending all underground mining on its East Rand Proprietary Mines (ERPM) project and cutbacks at the Crown mine.

DRDGold has had to retrench 1 300 employees because of the suspension of underground operations at ERPM.

In the quarter, DRDGold announced it would acquire the remaining 35% of the Elsburg Gold Mining Joint Venture, resulting in its 100% ownership.

DRDGold's stock price was down 0.87% on Friday morning with a last trade of R7.95, and a gold price trading at $914.70, up 0.19%.

For the six months to end-December 2008, basic earnings per share fell by 93% to 15.3c when compared with the same period in 2007. The two periods are not comparable however as in the 2007 financial year, DRDGold received R1.2bn for the sale of its Australasian assets.

As a result, DRDGold moved from a diluted headline loss of 9.2c/share for the six months to end-December 2007 to headline earnings of 24.1c/share.

- Fin24.com