DRDGold warns it may undershoot production guidance

DRDGOLD warned it may undershoot production guidance for its financial year ended June after it suffered the effects of heavy rain in its third quarter.Commenting on a production update on Wednesday, the company said declines in tonnages and yield in the March quarter could see the company “fall marginally short of its production guidance”.Guidance for the year was put at between 155,000 and 165,000 ounces while operating unit cost guidance of R870 000/kg might also be exceeded it added.The company, which operates gold recalamation sites at Ergo and Far West Gold Recoveries on the east and west of Johannesburg respectively, reported a 12% decline in gold production to 35,141 ounces in the first quarter compared to the previous quarter (second) quarter. Yield also declined, down 7% to 0.181g/t.Cash operating costs increased 10% to R964,235/kg.The outcome for the miner was a 6% reduction in adjusted net Ebitda (earnings before interest, tax and depreciation) to $41.2m, or a 2% decline rand terms to R761.7m.DRDGold doesn’t report detailed financial information in the first and third quarters, but it said in its production update that cash and equivalents increased by R289.3m to R950.5m, funds that would directed towards its extended capital programme.The company sanctioned a R10bn project build last year – an increase on the earlier R7bn capital spend – which runs until 2028, when it hopes to have added a ton of additional gold production. Despite this, shareholders could look forward to continue returns.“[T]he recent surge in the gold price and barring any unforeseen events, places the company in a favourable position to consider declaring a final dividend in August 2025,” DRDGold said in notes to its update.However, the gold price heals all wounds at present. The price received was about R1.69m per kilogram, an increase over the previous quarter of 10%. The rand gold price is currently at R1.99m/kg, an increase at spot of nearly 18%.DRDGold was listed for 130 years old in late April. Commenting on the company’s legacy, CEO Niël Pretorius said the company was what “sustainability is all about” given the rehabilitation implicit in gold dump reclamation.Shares in the company inched down in early Johannesburg trade but on a year-to-date basis, they are 67% higher, valuing the company at R23.7bn.The post DRDGold warns it may undershoot production guidance appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com