DRDGOLD Limited has told investors it expects to be in a position to pay an interim dividend after reporting higher sales on the back of an increase in first-quarter gold production.
Quarter-on-quarter gold production increased by 7% to 1,449 kilograms (kg), the South Africa-focused mine tailings specialist said in an operational update for the three months ended September 30, 2021. Gold sales rose by 5% to 1,428 kg.
The company said higher electricity and labour costs that took effect in July 2021 resulted in a 5% increase in cash operating costs to 566 317 rand per kg. Cash operating costs per ton of material processed increased by 6% to 114 rand per ton.
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All-in sustaining costs and all-in costs were lower at 648 880 rand per kg and 667 15 rand per kg respectively following a reduction in sustaining capital expenditure. Adjusted underlying earnings (EBITDA) increased by 16% to 350.8 million rand, due mainly to the 5% increase in gold sold and a 2% increase in the average rand gold price received, the company said.
Cash and cash equivalents decreased by 276.8 million rand to 1,903.2 millionr and after paying a final cash dividend of 345.2 million rand for the year ended June 30, 2021. It said cash generated during the current quarter will be applied towards its extended capital expenditure program.
The company, which remains free of any bank debt, noted that it "remains in a favourable position to, in the absence of unforeseen events, consider declaring an interim dividend in February 2022.”
DRDGOLD is majority-owned by Sibanye-Stillwater, a major platinum group metals (PGMs) and gold producer. It operates the Ergo Mining Operations (EMO) business on the eastern Witwatersrand, and also the Far West Gold Recoveries project.
Contact the author at stephen.gunnion@proactiveinvestors.com