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DRDGOLD declares 0.25 rand per-share dividend following hike in operating profits

Key drivers for the operating profit jump were a 33% hike in gold production and a 26% rise in the average Rand gold price

DRDGOLD Limited - DRDGOLD Limited of South Africa declares R$0.25 per share dividend following a six-fold year-over-year increase in the group’s operating profit
Higher gold production stemmed from steady performance at the company's Ergo and Far West Gold Recoveries operations

DRDGOLD Limited (NYSE:DRD) has declared a dividend of 0.25 rand per share following a six-fold year-over-year increase in the group’s operating profit to 719.6 million rand for the six months that ended December 31, 2019. 

In a statement Wednesday, CEO Niël Pretorius said key drivers for the jump in operating profit were a 33% increase in gold production to 3,037 kg and a 26% rise in the average Rand gold price received.

For the Johannesburg-based gold producer, higher gold production was a consequence both of steady performance from the Group’s Ergo operation and of the first phase of its Far West Gold Recoveries (FWGR) operation reaching full throughput of 500,000 tpm, Pretorius said. 

READ: DRDGOLD shares jump as 2019 trading statement highlights major top and bottom-line growth

The latter also contributed to the bulk of the group’s 18% increase in total cash operating costs to 1,377.3 million rand. 

Headline earnings of 332.7 million rand (48.4 rand cents per share) were reported, compared with a headline loss of 46.3 million rand (7.2 rand cents per share) in the previous period.

“We look forward to building on the solid performance from both Ergo and FWGR, and to further enhance our resilience to poor service delivery and crime. We are on track to meet the upper range of our FY2020 guidance for the Group as a whole and we will work hard to keep up the momentum,” Pretorius said 

“The work we have put in over the years in terms of social and natural value-add now stand us in good stead in developing our narrative in terms of the heightened awareness of ESG (environmental, social, and governance). We want increasingly to be associated with remediation and rolling back the environmental legacy of mining on the Witwatersrand."

He added: “In terms of developing the potential of the business, we are moving full steam ahead on the studies required to realise Phase II of FWGR and it is our intention to also ‘start the conversation’ on our moving into the reprocessing of Platinum Group Metals (PGM) dumps.”

Contact the author: [email protected]

Follow him on Twitter @PatrickMGraham

Quick facts: DRDGOLD Limited

Price: 15.43 USD

Market: NYSE
Market Cap: $1.32 billion

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