results for the quarter ended 30 september 2010 · 1 results for the quarter ended 30 september...

1

Results for the quarter ended30 September 2010

Niël Pretorius, CEOCraig Barnes, CFO

21 October 2010

Disclaimer

Many factors could cause the actual results, performance or achievements to be materially differentfrom any future results, performance or achievements that may be expressed or implied by suchforward-looking statements included in this document, including, among others, adverse changes oruncertainties in general economic conditions in the markets we serve, a drop in the gold price, asustained strengthening of the Rand against the Dollar, regulatory developments adverse toDRDGOLD or difficulties in maintaining necessary licences or other governmental approvals,changes in DRDGOLD's competitive position, changes in business strategy, any major disruption inproduction at key facilities or adverse changes in foreign exchange rates and various other factors.

These risks include, without limitation, those described in the section entitled "Risk Factors" includedin our annual report for the fiscal year ended 30 June 2009, which we filed with the United StatesSecurities and Exchange Commission on 27 November 2009 on Form 20-F. You should not place

d li th f d l ki t t t hi h k l f th d t th f W d

2

undue reliance on these forward-looking statements, which speak only as of the date thereof. We donot undertake any obligation to publicly update or revise these forward-looking statements to reflectevents or circumstances after the date of this report or to the occurrence of unanticipated events.

2

Highlights for the quarter

6% increase in gold production

Operating profit of R69.4 milliong

R500 million Domestic Medium Term Note Programme established

Blyvoor achieves:

• 1 million fatality-free shifts

• 4 million fall of ground fatality-free shifts

3

Group trends

4

3

5 000

6 000

Tonnes milled (’000)

1 000

2 000

3 000

4 000

5 000

5

0

Dec 08 Mar 09 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10

Underground Surface

4.50

5.00

Yield (g/t)

1.00

1.50

2.00

2.50

3.00

3.50

4.00

6

0.00

0.50


Underground Surface

4

1 200

1 400

Gold produced (kg)

200

400

600

800

1 000

1 200

7

0

200


Underground Surface

1 350

1 500

Cash operating cost (R/t)

300

450

600

750

900

1 050

1 200

8

0

150


Underground Surface

5

350 000

400 000

Cash operating cost (R/kg)

100 000

150 000

200 000

250 000

300 000

350 000

9

0

50 000


Underground Surface

100

120

Effect of winter power surcharge on cash operating profit (Rm)(actual vs adjusted)

0

20

40

60

80

Dec 09 Mar 10 Jun 10 Sep 10

Actual operating profit (including winter surcharge)

Adjusted operating profit (excluding winter surcharge)

1010

6

Ergo trends

11

3 500

4 000

Ergo: volume (’000t)

500

1 000

1 500

2 000

2 500

3 000

12

0

500

Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10

7

0.40

0.45

Ergo: head grade (g/t)

0.10

0.15

0.20

0.25

0.30

0.35

13

0.00

0.05


Ergo: yield (g/t)

0 10

0.12

0.02

0.04

0.06

0.08

0.10

14

0.00


8

350

400

Ergo: gold produced (kg)

50

100

150

200

250

300

15

0

50


Ergo: costs (R/t)

25

30

5

10

15

20

25

16

0


9

Ergo: pipeline timeline

Month/year Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug

Week 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62

Pipeline

Steel Installation

Stage 1 Brakpan to Benoni

Stage 2 (team 1) City to Elsburg

Stage 2 (team 2) City to Elsburg

Stage 3 Benoni to Elsburg

Stage 4 City to Crown

HDPE lining

Stage 1 Brakpan to Benoni

Stage 2 City to Elsburg

Stage 3 Benoni to Elsburg

Ergo

Elsburg

Benoni Elsburg

Crown

City Deep

17

g g

Stage 4 City to Crown

Pump stations

3/A/2

3/L/42

City Deep pump house

Elsburg booster pumps

BTB booster

Second leach stream

Blyvoor: post-restructuring trends

18

10

Blyvoor: post-restructuring underground trends

1919

Operational review: Blyvoor

Quarter

Sep 2010% change

Gold producedTotal

Volume, grade, production increase

• more opening up, development

Costs riseoz 30 287 13

kg 942 13

Underground

oz 24 210 15

kg 753 15

Surfaceoz 6 077 7

kg 189 7

Cash operating costs

TotalUS$/oz 1 216 (1)

R/kg 287 668 2

Underground

23 00025 00027 00029 00031 00033 00035 000

Sep 09 Dec 09 Mar 10 Jun 10 Sep 10

oz

Gold production

• higher winter power tariff, wage increase

Operating profit down

• higher costs, lower Rand gold price received

20

Underground

US$/oz 1 373 -

R/kg 324 898 3

Surface

US$/oz 589 (2)

R/kg 139 339 1

Operating profit

US$m 0.5 (17)Rm 3.4 (26)

140160180200220240260280300320


Rm

Revenue Net operating costs

Gold production

11

Quarter

Sep 2010% change

Gold produced

Operational review: Crown

Production steady

Costs rise

• higher winter power tariff, wage increaseoz 23 952 (1)

kg 745 (1)


US$/oz 972 (12)

R/kg 229 740 (9)

Operating profit

US$m 6.4 (12)

Rm 46.9 (15)15 000

17 500

20 000

22 500

25 000

27 500


oz

Gold production

Operating profit lower

• higher costs, lower Rand gold price received

2121

100

140

180

220

260


Rm


Operational review: Ergo

Production steady

Costs rise

•higher winter power tariff, wage increase

Quarter

Sep 2010%

change

Gold produced

Operating profit lower

•higher costs, lower Rand gold price received

oz 11 028 1

kg 343 1


US$/oz 968 (19)

R/kg 229 015 (16)

Operating profit

US$m 2.6 (38)

Rm 19.1 (40)0

2 000

4 000

6 000

8 000

10 000

12 000


oz

Gold production

22

020406080

100120


Rm


12

Financial review: income statement

Quarter

Sep 2010

Quarter

Jun 2010Comments

Rm RmRm Rm

Revenue 623.6 521.7 Up 20% due to 21% increase in gold sold

Net operating costs (554.2) (430.2) Cash operating costs up 11%, winter surcharge, wage increase

Operating profit 69.4 91.5 Down 24% due to higher costs and lower Rand gold price

Finance income 5.3 7.4 Down 28% due to lower cash balances and interest rates

Retrenchment costs (0.4) (0.5)

Depreciation (27.6) (57.7) Down 52% due to Crown’s increased LOM

Other income and costs (49.7) 250.2 Q4 2010 incl. R110.9m rehab and R156.7m FCTR credits

23

O e co e a d cos s ( 9 ) 50

(Loss)/profit before tax (3.0) 290.9

Taxation (5.3) (43.0)

Net (loss)/profit (8.3) 247.9

Adjusted headline earnings (cps) 2.5 22.3

Impacted by higher costs and lower Rand gold price; not comparable because of accounting adjustments in Q4 FY10

Financial review: balance sheet

30 Sep 2010

30 Jun 2010

Comments

Rm Rm

Property plant and equipment 1 896 0 1 863 2Property, plant and equipment 1 896.0 1 863.2

Non-current investments and other assets 24.8 48.1

Environmental rehabilitation trust funds 129.3 126.1

Deferred tax asset 137.6 140.7

Cash and cash equivalents 146.6 188.2 Decrease, ongoing pipeline project capex

Other current assets 249.6 213.9

Total assets 2 583.9 2 580.2

Equity 1 622.6 1 649.9

Long-term liabilities 53 4 72 4 No debt DMTN R108m from October

24

Long term liabilities 53.4 72.4 No debt, DMTN R108m from October

Provision for environmental rehabilitation 429.5 420.6

Deferred tax liability 166.7 168.1

Current liabilities 311.7 269.2

Total equity and liabilities 2 583.9 2 580.2

Current ratio 1.3 1.5 Healthy current ratio maintained

13

Zimbabwe update

Leny claims increase again:

• to 60, covering 602 hectaresg

First five holes drilled – 1 176m

• extensive sulphides, mineralisation

• assay results expected, end-November

• trenching, drilling results will inform second-phase drilling

Second 100ha project:

2525

Second 100ha project:

• exploration to start January 2011

Four new prospects being investigated

Zimbabwe timeline

• Zimbabwe Investmentauthority approval li 00746

• install and commission required plant

• assay results from drill core

Dec 2009 Apr 2010 May 2010 Jun 2010 Aug 2010 2012/2013 2014

• mapping of existing area and

license 00746

• first phase 5 hole drilling programme

Oct 2010Sep 2009 2011

MiningHeads of agreement signed

• magnetic survey• IP Survey

• interpret results and select drilling targets

ypegged and registered

• additional 19x10ha claims commission scrubber plant

• commission scrubber plant depending on results from second phase drilling programme

26

• mapping of existing area and infrastructure

• sampling existing pits and trenches

• first phase 5 hole drilling programme• install rubber scrubber plant• first phase trenching programme

• (15 trenches)• environmental plan approval

14

Share price gearing to gold price

1.20

1.40

0 20

0.40

0.60

0.80

1.00

1.20

27

0.00

0.20

01/09/10 11/09/10 21/09/10 01/10/10

DRDGOLD Gold Price

27

Looking ahead

Take full advantage of higher gold price

Improve production trends

Manage costs

Restore margin

2828

15

Registered office

1st Floor, Quadrum 1

Contact details

Tel: +27 (0) 11 470 2600

Contact details

Quadrum Office Park

50 Constantia Boulevard

Constantia Kloof Ext 28

Roodepoort

South Africa

PO Box 390

Maraisburg 1700

South Africa

Fax: +27 (0) 11 470 2618

Email: [email protected]

[email protected]

Website: www.drdgold.com

Shareholder data

(Incorporated in the Republic of South Africa)

Registration No.1895/000926/06

JSE share code: DRD

29

ISIN: ZAE 000058723

Issuer code: DUSM

NASDAQ trading symbol: DROOY

Results for the quarter ended30 September 2010

Niël Pretorius, CEOCraig Barnes, CFO

21 October 2010

results for the quarter ended 30 september 2010 · 1 results for the quarter ended 30 september...

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