Johannesburg, Oct 27, 2005 AEST (ABN Newswire) - DRDGOLD Limited (JSE: DRD; NASDAQ: DROOY; ASX: DRD; POM SoX: DRD) today announced Group gold production of 135 630 ounces (oz) for the quarter ended 30 September 2005, 1% down on the previous quarter.
Production from the South African operations increased by 5% to 67 710 oz, reflecting a continuing process of stabilisation at Blyvooruitzicht (Blyvoor) and East Rand Proprietary Mines Limited (ERPM), the company said.
Attributable production from the Australasian operations was 6% lower at 67 920 ounces (oz), due mainly to continuing operational constraints at Porgera and Tolukuma.
Group cash operating costs were 9% higher at US$356/oz. Cash operating costs at the Australasian operations rose 9% to US$308/oz, reflecting lower production at Porgera and Tolukuma and higher fuel costs affecting these operations as well as Emperor's Vatukoula mine.
Cash operating costs at the South African operations increased by 7% to US$419.
Blyvooruitzicht (Blyvoor)
Total gold production rose 6% to 43 822 oz, reflecting a 40% increase in surface production to 9 196 oz due both to increased throughput from the slimes dam project and the milling of waste rock, the latter at a average grade of 1 gram per tonne (g/t).
Underground production was slightly lower at 34 626 oz, reflecting a 17% decline in area mined to 35 000 square metres (m2) and a 21% decrease in yield to 6.23 g/t. The main contributor was the loss of high grade panels due to seismic activity during July that necessitated the temporary redeployment of six crews to lower grade areas. Increased sweeping and vamping helped to offset the negative impact. The affected high grade panels have been re-established and production from these will resume in the course of the current (December) quarter.
Mine call factor (MCF) showed improvement, largely due to the successful implementation of single cartridge blasting that results in bigger rock fragmentation and consequently, less gold loss.
Productivity, in terms of grams per total employee costed (g/tec) increased by 5% to 130.41 g/tec, reflecting the benefits of continuing training for in-stope personnel and a further reduction in the average temperature at working faces to 29.5 C.
Development increased by 72% to 729 metres (m), reflecting better ore pass management and the introduction of an incentive scheme for development crews. Opening up increased by 36% to 1 466 m.
Overall cash operating costs were 7% higher at US$419/oz. Key contributors were the cost of filling two sinkholes that occurred within the mine's lease area during the quarter; the impact of Eskom's higher winter tariffs on power costs; and the effect of back-dating the 2005 wage increase to 1 July, 2005. Wage negotiations progressed very satisfactorily and settlement ? 6% in the current financial year and 6.5% in the 2006 financial year ? was reached without recourse to industrial action.
The opening up of Carbon Leader panels on 15 level of the No 2 Sub-Shaft Project is behind schedule due both to a delayed start and to geological features that have been encountered. In terms of a revised plan, mining has been switched to easier-to-access, higher grade areas at No 4 Shaft. In addition, less faulted, higher grade areas on 15 level of the project will be prioritised. Work on accessing the No 2 Sub-Shaft from No 5 Shaft on 15 level is slightly ahead of schedule.
The slimes dam expansion project was commissioned during September 2005 as anticipated and production is building smoothly to the planned 300 000 t per month. The plant upgrade has been completed and efficiencies have improved, as expected.
East Rand Proprietary Mines Limited (ERPM, 40%)
Total attributable gold production was 7% lower at 11 600 oz, reflecting a 10% decline in attributable underground gold production to 8 719 oz. Attributable surface production, however, was 6% higher at 2 881 oz.
Lower underground production resulted from the combined effects of traversing geological discontinuities encountered and lower development. The former slowed the pace of mining, increased stoping width and thus, the volume of waste mined. As a result, yield was 14% lower at 7.88 g/t. Production in the current (December) quarter is expected to be affected somewhat, due to the need to re-develop working areas.
A 35% decline in development to 336 m arose from a re-organisation of labour. Development, however, is now back on track. While a shortage of available face meant that area mined during the quarter was unchanged at 18 000 m2, this situation is expected to improve in the current (December) quarter due to increased development making more face available for mining.
Opening up and development on and above 70 level has begun. In future, this will reduce pressures on the availability of the decline shaft.
The increase in surface production reflects improved milling capacity of Cason Dump material at the ERPM plant, following the completion of repairs. Milling of material from Cason is expected to improve further with the installation of two additional mills at the Knights plant, scheduled for completion in March 2006.
Overall cash operating costs increased by 11%, reflecting the cost of additional timber support required to traverse the underground faulting referred to above; the cost of an additional pump required for the pumping upgrade programme (see below); and payment of an installment for the plugging project, pending the availability of funds from the Department of Minerals and Energy (DME).
Phase 1 of the plugging project has been completed and Phase 2 is now 40% completed. The third and final phase is scheduled to begin in August 2006. The pumping upgrade programme is on schedule and has been re-scoped to include mud-handling facilities. These will cost an additional R7 million but payback from additional gold recovery is expected in a 12-month timeframe.
Wage negotiations are currently under way.
Crown (40%)
Attributable gold production was 13% higher at 12 288 oz, a 16% increase in yield to 0.43 g/t more than compensating for a 1% decline in tonnage treated to 894 000 t.
The improvement in yield resulted both from the successful commissioning of the CMR (2/A/1) reclamation site and a general improvement in extraction rates at Crown's three plants.
Cash operating costs were 6% lower at US$373/oz, reflecting high gold production.
Wage negotiations are currently under way.
Porgera (20%)
While yield was 3% higher at 4.80 g/t, ore milled was 5% lower at 281 000 t, resulting in a 2% decline in attributable gold production to 43 395 oz.
Key amongst the factors impacting negatively on production were a seven-day power cut due to powerline disruptions; mill feed dilution; pumping restrictions in the ball mill circuit; and a general re-allocation of resources for the removal of slip material from the previously-reported West Wall failure.
Cash operating costs increased by 16% to US$264/oz due to lower gold production and higher fuel and chemical costs.
Tolukuma
Gold production was 24% lower at 14 199 oz. This reflects a 10% decrease in ore milled to 47 000 t and a 16% decline in yield to 9.40 g/t.
Production was affected both by a lack of available stoping areas, leading to the mining of more underground stockpiled material, and by bad weather. The latter resulted in 19 'no-fly' days, during which stocks ? primarily diesel for power generation and reagents for the milling process ? could not be airlifted to the mine. Consequently, 11 days' production ? the equivalent of some 2 300 oz ? were lost.
As a result of lower production, cash operating costs were 7% higher at US$441/oz. Significant savings were made in mobile maintenance and underground mining during the quarter under review however, helping to offset higher fuel prices and consumption arising from reduced water for hydro power generation.
Emperor (45.33%)
Attributable gold production increased by 9% to 10 326 oz, reflecting a 20% increase in ore milled to 54 000 t. Yield was 9% lower at 5.94 g/t.
Development to open up reserves and increase mineable face length was some 49% higher at 3 802 m.
These increases reflect the successful deployment under the new DRDGOLD-led management team of the so-called Me Caka (Do It) Process, a key feature of which has been a switch from a 6/2 (six days on, two days off) roster to a 5/2 (five days on, two days off) roster to improve worker morale and productivity. Indicative of improved worker morale has been a significant reduction in shifts lost due to absenteeism, from an average of 2 000 a month to 600
Contact
South Africa
Investor and Media Relations
Ilja Graulich, DRDGOLD
+27 11 219 8707(office)
+27 83 604 0820 (mobile)
James Duncan, Russell & Associates
+27 11 880 3924 (office)
+27 82 892 8052 (mobile)
North America
Investor and Media Relations
Barbara Cano, Breakstone Group International
+1 646 452 2334 (office)
Australasia
Investor and Media Relations
Paul Downie, Porter Novelli
+61 893 861 233 (office)
+61 414 947 129 (mobile)
United Kingdom/Europe
Investor and Media Relations
Phil Dexter, St James's Corporate Services
+44 20 7499 3916 (office)
+44 779 863 4398
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