DRDGOLD Ltd (NYSE:DRD) stock climbed Tuesday after the South African miner revealed that it lifted gold production in the most recent quarter, boosted by output from its Far West Gold Recoveries (FWGR) project.
For the quarter ended March 31 gold production increased by 15% to 1,279 kilograms, or 41,120 ounces, compared to 1,111 kilograms, or 35,732 ounces, in the preceding quarter. The ore milled expanded 11% to 6,373 metric tonnes compared to 5,755 metric tonnes in the prevbious quarter.
“Overall yield increased by 4% compared to the previous quarter due to higher grade material being processed at the Far West Gold Recoveries project, as well as improved yield at Ergo Mining Proprietary Limited,” the company said in a statement.
READ: DRDGOLD cites progress with Far West Rand Gold operation in South Africa with upgrade of its tailings storage facility
Shares in the Johannesburg-based miner rose 3.2% to $1.91 in afternoon trading.
Gold produced includes 149 kilograms from the Far West Gold Recoveries project, the Johannesburg-based miner said.
The company sold 1,250 kilograms, or 40,189 onces of gold, in the reporting period, compared with 1,137 kilograms, or 36,556 ounces, in the prior comparable period.
In good news digested by Wall Street, DRDGOLD revealed that external borrowings fell to R17 million at the end of March from R173.3 million on 31 December 2018.
"We attribute the reduction in debt mainly to the operating and financial performance of the existing Ergo Group operations, as well as the fact that the ramp up of the Far West Operations has been a success which helped reduce draw drowns to fund the R330 million capital expansion there and sped up the repayment of debt," DRDGOLD CEO Niel Pretorius told Proactive Investors.
West Rand acquisition
The company recently acquired gold and platinum miner Sibanye-Stillwater’s West Rand Tailings Retreatment Project (WRTRP) in South Africa. As a result, the new Far West Gold Recoveries crown jewel virtually doubles the South African miner’s gold reserves to 5.9 million ounces from 2.99 million ounces.
With the WRTP acquisition, DRDGOLD is building a large plant to process a million tons a month and a tailings storage facility that could act as a catalyst to consolidating more dumps west of Johannesburg.
The West Rand assets currently include a range of gold-bearing dumps near Carletonville west of Johannesburg, as well as three processing plants.
— Updates with CEO comments, reduction in debt, share activity —
Contact Uttara Choudhury at [email protected]