3848-10 qr q ended 30 june 2010 5small.ppt - drdgold · 2010 reserves (moz) 2010 resources (moz)...
TRANSCRIPT
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Results for the quarter ended 30 June 2010
Niël Pretorius, CEOCraig Barnes, CFO
26 August 2010
Disclaimer
Many factors could cause the actual results, performance or achievements to be materially differentfrom any future results, performance or achievements that may be expressed or implied by suchforward-looking statements included in this document, including, among others, adverse changes oruncertainties in general economic conditions in the markets we serve, a drop in the gold price, asustained strengthening of the Rand against the Dollar, regulatory developments adverse toDRDGOLD or difficulties in maintaining necessary licences or other governmentalapprovals, changes in DRDGOLD's competitive position, changes in business strategy, any majordisruption in production at key facilities or adverse changes in foreign exchange rates and variousother factors.
These risks include, without limitation, those described in the section entitled "Risk Factors" includedin our annual report for the fiscal year ended 30 June 2009, which we filed with the United StatesS iti d E h C i i 27 N b 2009 F 20 F Y h ld t l
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Securities and Exchange Commission on 27 November 2009 on Form 20-F. You should not placeundue reliance on these forward-looking statements, which speak only as of the date thereof. We donot undertake any obligation to publicly update or revise these forward-looking statements to reflectevents or circumstances after the date of this report or to the occurrence of unanticipated events.
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Highlights for the quarter
Dividend declared of 5 cents per share
Operating profit of R91.5 million
Headline earnings increased to 23.9 cents per share
No fatalities; continued drive for safety improvement
Ergo: higher volumes, lower costs improve margin
Crown/Ergo pipeline goes ahead
Blyvoor trending towards stability
Zimbabwe: 80% increase in exploration area
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Group trends
4
3
Tonnes milled (’000)
55
Yield (g/t)
66
4
Gold produced (kg)
77
Cash operating cost (R/t)
88
5
Cash operating cost (R/kg)
99
Cash operating profit (Rm)
1010
6
Ergo trends
11
Ergo: volume (’000t)
1212
7
Ergo: head grade (g/t)
1313
Ergo: yield (g/t)
1414
8
Ergo: gold produced (kg)
1515
Ergo: costs (R/t)
1616
9
Ergo: costs (R/kg)
1717
Ergo: margin (R/kg)
1818
10
Ergo: margin ($/oz)
1919
Crown/Ergo pipeline
20
11
Blyvoor: post-restructuring trends
21
Blyvoor: face length mined (m)
22
12
Blyvoor: m²/in-stope employee
23
Blyvoor: reef tonnes broken
24
13
Blyvoor: gold broken (kg)
25
Operational review: Blyvoor
No 5 Shaft volume recovery continues
Quarter
June 2010% change
Gold producedTotaly
Surface production down: low-grade No 4 Dam materialoz 26 685 (7)
kg 830 (7)
Underground
oz 21 027 (2)
kg 654 (2)
Surfaceoz 5 658 (23)
kg 176 (23)
Cash operating costs
TotalUS$/oz 1 204 (24)
R/kg 293 034 (24)
Underground
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Underground
US$/oz 1 373 (18)
R/kg 333 986 (19)
Surface
US$/oz 580 (38)
R/kg 140 858 (39)
Operating profit
US$m 0.6 (84)Rm 4.6 (84)
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Operational review: Crown
ERPM’s Cason retreatment operation incorporated
Quarter
June 2010% change
Gold producedp p
Higher capex: Crown/Ergo pipeline long-lead itemsoz 24 081 1
kg 749 1
Cash operating costs
US$/oz 869 (3)
R/kg 211 216 (3)
Operating profit
US$m 7.3 9
Rm 55.1 9
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Operational review: Ergo
Volumes stabilising with second Elsburg line up and running
Production rising
Recoveries improving
Quarter
June 2010%
change
Gold producedp g
US$400 margin
Continuing R&D to improve recovered grade
oz 10 866 11
kg 338 11
Cash operating costs
US$/oz 815 10
R/kg 198 118 10
Operating profit
US$m 4.2 86
Rm 31.8 85
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Financial review: income statement
Quarter
June 2010
Quarter
Mar 2010
Rm RmRm Rm
Revenue 521.7 524.0
Net operating costs (430.2) (427.1)
Operating profit 91.5 96.9
Finance income 7.4 5.5
Retrenchment costs (0.5) (0.3)
Depreciation (57.7) (45.2)
Other income and costs 250.2 (39.3)
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O e co e a d cos s 50 (39 3)
Profit before tax 290.9 17.6
Taxation (43.0) (5.3)
Net profit 247.9 12.3
Attributable to shareholders 240.9 9.9
Financial review: balance sheet
30 June 2010 31 Mar 2010
Rm Rm
Property, plant and equipment 1 863.2 1 730.7
Non-current investments and other assets 48.1 43.0
Environmental rehabilitation trust funds 126.1 141.4
Deferred tax asset 140.7 200.3
Cash and cash equivalents 188.2 201.3
Other current assets 221.2 263.0
Total assets 2 587.5 2 579.7
Equity 1 649.9 1 539.7
Long-term liabilities 72.4 108.5
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Provision for environmental rehabilitation 420.6 440.4
Deferred tax liability 168.1 172.4
Current liabilities 276.5 318.7
Total equity and liabilities 2 587.5 2 579.7
Current ratio 1.5 1.5
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Attributable reserves
2010 reserves (7.3Moz) 2009 reserves (6.1Moz)
4.3Moz
1.5Moz
0.2Moz
5.3Moz
1.3Moz
0.7Moz
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Blyvoor ERPM Crown
Attributable resources
2010 resources (60.0Moz) 2009 resources (56.4Moz)
30.4Moz
18.9Moz
3.0Moz
4.1Moz
37%
5%
7%
22.4Moz
30.3Moz
3.1Moz4.2Moz
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Blyvoor ERPM Crown Ergo
52%
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Attributable reserves and resources: surface/underground split
2010 reserves (Moz) 2010 resources (Moz)
9.8Moz
50.2Moz
2.2Moz
5.1Moz
3333
Surface Underground
50.2Moz
Zimbabwe update
Leny claims increase from 16 (253ha) to 46 (454ha)
Exploration: Exploration:• magnetic survey completed• induced polarisation survey
under way• three drill target areas
identified; drill rig on site Gold recovery planned during
exploration• some plant and equipment
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• some plant and equipment already on site
• site of works plan, environmental plan, water rights approvals pending
• R5.2 million spent to date
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Sustainability: local economic development (LED), corporate social investment (CSI)
LED
• component of Social and Labour Plans (SLPs)
• SLPs required for mining rights (MPRDA)
Flagship LED project
• Ekurhuleni Business Development Academy (Ergo)
• R4.9 million capital investment
• 254 students currently enrolled
• 25% IT
• 17% first aid health and safety
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• 17% first aid, health and safety
• 16% metallurgy
• 15% ABET
• 13% engineering
• 1 145 graduates since inception in 2008
Sustainability: local economic development (LED), corporate social investment (CSI), cont’d
CSI• FY10 spend: R13.6 million
C it i• Criteria:• projects within communities
around operations and from which labour is drawn
• ROI not essential; general community upliftment and of particular individuals is
• Kinds of support:• financial
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• financial• managerial time, expertise• logistics, infrastructure
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Delivering on strategy
Managing risk• higher production from surface retreatment (70% of FY10
production)production)• decrease in environmental rehabilitation liabilities due to:
• disposal of Durban Roodepoort Deep and West Wits Mining licences (R68 million decrease)
• mining of ERPM’s Elsburg Tailings Complex and other ongoing rehabilitation at ERPM (R5 million decrease)
• debt-free balance sheet with healthy current ratio
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Delivering on strategy, cont’d
Lowering costs• only single-digit FY10 wage increase in SA gold sector• corporate costs 23% pa lower on average for past three years• corporate costs 23% pa lower on average for past three years• annual total cost increase limited to 7%
• significantly below industry average and in spite of high electricity costs, increased Ergo volumes
• lowest R/t cost in SA gold sector (R77/t)
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Delivering on strategy, cont’d
Increasing margin
• Crown, Ergo Q4 operating margin 28% and 32% respectively
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Looking ahead
Ergo: volume, mix and recoveries
• phase out Benoni Dam now that d El b li l t dsecond Elsburg line completed
• continuing R&D
Blyvoor: continuing focus on sustainability drivers
• face length
• face advance
• productivity (m²/tec)
40
• ‘mix’ management
Crown: pipeline link with Ergo
21
Results for the quarter ended 30 June 2010
Niël Pretorius, CEOCraig Barnes, CFO
26 August 2010