DRDGOLD Ltd (NYSE:DRD, JSE:DRD, OTC:DRDGF), the mine tailings retreatment specialist, has declared an interim dividend of 20 cents per share for the six months ended December 31, 2021, its 15th successive year of distribution, after gold production beat forecasts for the period.
The South Africa-focused firm, which is majority-owned by Sibanye-Stillwater, the major platinum group metals (PGMs) and gold producer, operates the Ergo Mining Operations (EMO) business on the eastern Witwatersrand, and also the Far West Gold Recoveries (FWGR) project.
“We are pleased to report a strong finish, attributable mainly to an increase in gold recoveries and a higher average gold price compared to the first three months of the period,” DRDGOLD CEO Niël Pretorius said in a statement. “These contributed to headline earnings per share of 58.0 cents and free cash inflow of R406.9 million for the half year.”
Pretorius said DRDGOLD had cash and cash equivalents of R2,239.1 million at the period end, after paying a cash dividend of R345.5 million in September 2021.
READ: DRDGOLD says increased operating costs and Rand gold price fall have hit earnings in first half
“This has enabled us to declare an interim dividend of 20 cents per share, without inhibiting our capital investment programme and taking the number of years of uninterrupted dividend yield to 15,” the CEO noted.
The company said steady performances at both Ergo and Far West Gold Recoveries resulted in gold production exceeding forecasts by just over 5,980 ounces, softening the impact of the depletion of higher-grade reserves at Ergo and setting the business up favourably to achieve full-year production guidance.
Group revenue totalled R2,498.5 million in the first half, down 16% compared with the year-ago period. The company attributed the fall to a 13% decrease in the average Rand gold price received to R863,108 per kilogram (kg) as well as a 4% decrease in gold sold to 2,891kg.
Group operating profit decreased by 42% to R832.0 million, after accounting for cash operating costs, which were 11% higher at R1,680.2 million.
The company said it remained free of bank debt as at December 31, 2021.
DRDGOLD also said it has decided to build a solar power plant and a power storage facility at Ergo with a view to reducing its carbon footprint and address the uncertainty of the supply and cost of electricity.
Its board has approved the capital expenditure for the first phase, comprising an upgrade to the existing supply line to the Brakpan/Withok Tailings Storage Facility to an 88KVA line, the construction of an initial 20 megawatt (MW) PV plant and ten power storage facilities of 10MW each, the company said.
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