DRDGOLD'S production lower due to Eskom, ERPM

JOHANNESBURG - DRDGOLD’s gold production from continued operations was nine percent lower at 70,378 ounces for the quarter ended March 31, 2008 due both to the negative impact of Eskom’s power cuts in January and to a drop in underground grade at East Rand Proprietary Mines (ERPM), the company said on Friday.

However, both factors occurred at a time when the gold price was buoyant.

“It was estimated that, had it not been for the power cuts, the company’s operations would have produced an additional 3,000 oz,” chief executive John Sayers said.

The company reported that group revenue was 20 percent higher at R498.6 million, a consequence of a 32 percent increase in the average gold price received to R228,836/kg. After accounting for cash operating unit costs, which were 2 percent higher at R162 806/kg, cash operating profit was 199 percent higher at R142.2m, DRDGOLD said.

Sayers said that it was “difficult” to anticipate operational performance going forward “for so long as South Africa’s current power dilemma continues.”

“However, provided that Eskom is able to continue to supply power at 95 percent of its previous level and to continue to give notice of impending cuts, we remain optimistic that -- all other operational factors remaining stable -- we will be able to maintain current production levels,” Sayers said.

-Sapa