At Ergo Mining revenues rose by R526m to R2.7bn, attributable to a 26% increase in the Rand gold price. Photo: Supplied
DRDGold’s R1 billion revolving credit facility from Nedbank remained undrawn as at the end of 2024, with the company remaining free of bank debts as it benefited from currently elevated gold prices to post an increase in interim earnings of between 60% and 70% after revenues ramped up by 28%.
The revolving credit facility from Nedbank is earmarked to “support liquidity” for the gold producer as it pursues “significant capital expansion” programmes.
DRDGold “may draw as needed” from the facility, with a R500 million accordion option and a R500m general bank facility, although these “remained undrawn” as at the end of 2024.
The gold miner said on Thursday in a trading update it currently holds R661.2 million in cash and cash equivalents compared to R1.5bn at the end of 2023. DRDGold has “free cash inflow, calculated as cash from operating activities less cash outflow from investing activities of R318.9m, while cash outflow from investing activities reduced by R143.2m to R964m compared to R1bn in the first half of 2024.
This was after group cash operating costs for the half-year period under review increased by 6% to R2.2bn, with cash expenditure on capital projects decreasing by R127.1m or 12%.
“The marginal decrease was mainly due to the practical completion of key projects, such as commissioning of reclamation sites and the solar plant and BESS at Ergo, for which there was significant capital expenditure (capex) in H1 FY2024. The H1 FY2025 capex was mainly driven by ongoing key projects at FWGR such as the Regional Tailings Storage Facility (RTSF) construction, the Driefontein 2 Plant expansion and related pipeline infrastructure as well as the completion costs of the solar power plant and BESS at Ergo,” said DRDGold on Thursday.
The mining firm expects earnings per share (Eps) and headline earnings per share (Heps) for the interim period to be higher by between 109.2 cents and 116.0 cents compared to Eps and Heps of 68.4 cents for the first half of 2024. This represents an increase of between 60% and 70% while revenues for the half year to December are expected to be higher by 28% at R3.8bn.
At the Far West Gold Recoveries Proprietary, revenue is expected to rise by R302.1m to R1bn due to a 26% increase in the Rand gold price received and a 10% increase in gold sold to 731kg
“The increase in gold sold was mainly due to a 9% increase in yield from 0.215g/t in H1 FY2024 to 0.235g/t. Throughput tonnages remained consistent at 3.1 million tons.
At Ergo Mining revenues rose by R526m to R2.7bn, attributable to a 26% increase in the Rand gold price while throughput tonnages increased by 22% as a result of the successful commissioning and ramp-up of production from the 4L3, 4L14, and 5L27 dumps that started early in the 2024 calendar year.
These had managed to offset the effect of a reduction in yield from 0.233g/t to 0.187g/t due to lower average grades from newly commissioned sites although gold sold decreased by 2%.
BUSINESS REPORT