*DJ Durban Deep 4Q Gold Output 207,725 Oz vs 208,999 Oz 3Q
(MORE) Dow Jones Newswires
07-24-03 0205ET
*DJ Durban Deep 4Q Avg Gold Price ZAR86,348Kg vs ZAR93,734Kg
(MORE) Dow Jones Newswires
07-24-03 0207ET
DJ Durban Deep 4Q -2: Cash Op Costs $352/Oz vs $329/Oz
Durban Roodepoort Deep Ltd. - Johannesburg
All figures in dollars and cents.
12 Months June 30:
4Q 3Q
Net Profit $0.7 Mln $3.2 Mln
Gold Produced 207,725 Oz 208,999 Oz
Cash Op Costs $/Oz 352 329
*4Q 2002 numbers not provided
(MORE) Dow Jones Newswires
07-24-03 0227ET
DJ S Africa Durban Deep 4Q -3: Net Operating Loss $12.2 Mln
Edited Press Release
JOHANNESBURG (Dow Jones)--South African marginal gold miner Durban Roodepoort Deep Ltd (DROOY) said net profits for the fourth quarter ending June 30 fell to $0.7 million from $3.2 million in the third quarter due to an appreciating rand against the dollar.
The company's net operating loss was $12.2 million after allowing for increased depreciation and a $12.5 million write down on assets and investments.
While the dollar gold price remained constant during the quarter, the South African rand strengthened by 7%, to an average ZAR7.73 to the dollar, leading to a corresponding 8% drop in the rand gold price received.
Consequently, revenue of slightly more than ZAR42 million was forsaken. Gold production from operations was virtually unchanged, the slight fall recorded arising from poorer surface grades.
Cash costs in absolute terms were reduced by ZAR12.2 million and in unit terms by 1.2%, but the strength of the rand took the cost per ounce in dollar terms to $352 an ounce, which is above the current gold price.
This situation is unacceptable and, as a result, we have issued a 60-day notice - as required under the Labour Relations Act - to all unions and associations representing the 13,000 employees, including contractors, at our North West Operations (Hartebeestfontein and Buffelsfontein mines) that the future of these operations is under review.
Production at Blyvooruitzicht was affected by a blocked ore pass in the 1A Sub Shaft and poorer grades from the operation"s surface sources.
While approximately 20,000 tons of ore are locked up underground due to the ore pass problem, it is expected that the contained gold will be recovered this quarter.
Lower surface grades are likely to continue to December 2003, at which time feed from the higher grade Slimes Dam Project will replace current sources.
Our North West Operations have been the subject of considerable management attention over the past three months.
Measures taken have included a synergy exercise with Blyvoor in respect of sharing services; a reduction in overhead; a re-evaluation of the plant configuration; the removal of some 3,000 contract workers; a renewed focus on grade control; and opening up new blocks of ground.
However, surface sources have been rendered uneconomical by the current rand gold price and plans to upgrade the South Shaft plant to treat all feedstock have been shelved, pending the outcome of the 60-day review referred to above.
Tolukuma has now established itself as a consistent gold producer, with ore production now derived from at least six vein sources.
Grades continue to improve due to mining of the high grade Tinnabar vein and the discovery of the Zine vein on surface.
The latter, as well as the Miliahamba Deeps, will be drilled for strike extension this quarter.
Recent studies, including those conducted by government agencies, have established that the mine meets and exceeds all government compliance requirements.
A number of community programs have also been initiated. DRD has a 40% stake in the Crown Gold Recoveries JV with Khumo Bathong Holdings Ltd and manages the ERPM mine and Crown surface retreatment operation on behalf of the JV.
ERPM has recovered from the fire in February 2003 and the production build-up is on track.
Crown has secured funding of $22 million from the Industrial Development Corporation, which will be applied to reducing ERPM's pumping costs and retreating the Cason Dump.
The latter is expected to yield 30,000 ounces of gold production annually over 7 years.
Group capital expenditure for the quarter was a record $5.2 million excluding recoupments, but all capex programs are now under review due to the low Rand gold price.
At the year end, DRD had audited proven and probable ore reserves of 129.4 million tons at an average grade of 3.81 grams per ton, containing 15.8 million ounces of gold.
The life of our North West Operations is 16 years and of Blyvoor, 21 years.
Work on the Argonaut project involved expenditure of R0.3 million in the quarter but spending on this program has been curtailed in view of the Rand"s strength.
The company is pursuing litigation against various parties, including certain former directors and officers, for recovery of lost shareholder value.
During the quarter, we successfully overturned an ex-parte Anton Pillar order against the company and our claim for our lost Continental Goldfields investment was upheld in the West Australian Courts.
Meanwhile, we have completed our actions with the issue of our claims for loss from the defunct Rawas mine in Indonesia. Our total program now covers claims of approximately $22 million relative to, but not comparable with, the $80 million written off in the 2000 financial year.
The immediate future will depend on the trend in the rand/dollar exchange rate, with the rand having been exceptionally strong over the past six months and the outcome of the review of the North West Operations.
"While I know that management will do its utmost to preserve an economic future for these assets, equally DRD will not permit persistent losses at any of its operations," DRD's chief executive Mark Wellesley-Wood said.
"Building on our success at Tolukuma, we are engaged in a number of initiatives to implement our Australasian growth strategy," said Wellesley-Wood.
(END) Dow Jones Newswires
07-24-03 0253ET
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DJ Durban Deep 4Q -2: Cash Op Costs $352/Oz vs $329/Oz
Scubawarrior
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24-07-2003 18:27
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