DRDGold bucks the trend
Posts sharply higher earnings, but production is also down
DRDGold, South Africa’s fourth-largest gold producer, more than trebled its full-year earnings on Tuesday, as it benefitted from an overhaul of its business focusing it on gold reclamation.
Headline earnings for the year to end-June came in at 61 cents a share, despite a 6% decline in production to 135,708 ounces.
DRDGold’s production is focused on surface operations and the extraction of gold contained in mine dumps surrounding Johannesburg.
Chief executive Niel Pretorius, who describes his company as a gold plant more than a gold mine, is targeting production of between 140,000 and 150,000 ounces a year.
Pretorius said DRDGold could expand into other areas of reclamation and recovery.
“To the extent that we can do this, without violating the objects of sustainable development or our strategic commitment to low risk and high margins, it may well offer an exciting new strategic course,” he said.
The company declared a final dividend of 10 cents a share.
Shares of DRDGold have gained more than 50% in the past year compared to a 6,8% decline in the JSE’s Gold Index.