DRDGold cuts revised production guidance despite Ergo lift

DRDGOLD finally started mining of two sites at Ergo previously inaccessible owing to outstanding regulatory approvals and community disputes, but the firm would nonetheless post lower than guided production for its 2024 financial year.Commenting in a March (third) quarter production update on Friday, DRDGold said it “may fall marginally short of its production guidance due to reclamation sites commencing production later than planned”. It had previously guided to production of between 165,000 to 175,000 ounces.Revised operating cost guidance of R800,000 per kilogram might also be exceeded. DRDGold closes its financial year on June 30.Some good news however was a 5% increase in the gold price received – of R1.26m per kilogram of gold ($2,071/oz) – helped the firm to a 12% increase in adjusted Ebitda for the quarter of R494.5m (11% in US$).Production for the quarter totalled 39,449 oz, a decline of some 3%. All in sustaining costs increased 3% in the quarter to $912,695/oz. On a unit cost basis, cash operating costs were 1% higher at $1,345/oz.All things being equal, DRDGold should perform better in the final three months of the financial year given the strength of the gold price. Spot gold is currently trading at $2,357/oz – roughly $300/oz better than last quarter’s average which DRDGold can improve upon further if it lifts production.DRDGold is 51% controlled by Sibanye-Stillwater, the under-fire platinum group metals and gold miner. According to a report by RMB Morgan Stanley recently, higher gold prices stand to make DRDGold the largest contributor from gold to Sibanye-Stillwater’s Ebitda this year.Sibanye-Stillwater produces about 700,000 ounces a year from the Kloof and Driefontein mines,west of Johannesburg and Beatrix in the Free State. But the 180,000 oz/year tailings retreatment firm stands to comprise 16.7% of Sibanye-Stillwater’s Ebitda this year, equal to a R2.8bn contribution at current spot prices. This compares to DRDGold’s R1.7bn contribution last year comprising 8.5% of Sibanye-Stillwater’s total Ebitda.The post DRDGold cuts revised production guidance despite Ergo lift appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Zum vollständigen Artikel