Earnings Labs

DRDGOLD Limited (DRD)

Q3 2014 Earnings Call· Wed, May 14, 2014

$26.74

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Transcript

Francois van der Westhuizen

Management

We’re still working all of that out but it should leave the cost associated with the fine-grind and that would be sufficient to cover most of it. Niël Pretorius: Are we relieving 2 million month on the table so we didn’t slash away all of the 14 million in total cost, we’re leaving behind 2 million a month for the engineering upgrades. Adrian Hammond – BNP Cadiz: I had three questions for you Niël, firstly it appears to me now that with or without the fine-grind, you’ve uphill battle with rising unit costs on per tonne or on pounds basis. What more do you think you can do on the cost side to keep this business really I think we’re talking about sustainable -- I mean you have gone to all these pillars capital here and obviously the most concerning one is the environmental and as you continue mining your provision will continue to rise. So what’s left on the cost side that you can explore, that’s the first question. Secondly, with regards your intention to buy through minorities, could you just give us an update on that and what’s the implication for meeting your 2014 the BE charter requirements and then lastly as I understand they are pumping AMD now at ERPM through TCTA. What is your commercial agreement with them using your that -- these area -- any upside for you there? Niël Pretorius: I want to start with the last one first maybe it's something that I should have mentioned in my discussion of the environmental capital component and that is also our contribution into treating this increasing environmental threat or risk of asset mine drainage. Our arrangement with the TCTA is that they can lease from us the shaft infrastructure where they submerge their pumps and…

Unidentified Analyst

Management

Luren Gwinnie [ph] from RMB Morgan Stanley. Can you maybe give us an indication of the expected volumes and the yield that you will have between now out of your conventional low grade circuit until the high grade up of the grinding. Niël Pretorius: We’re obviously targeting the same levels of production that we saw before we switched this thing on. So that is the target number but there have been some changes, we’re phasing out the Cason dump, and 4A6 dump which is also a sand dump is going to come into the equation and there is also some of the high grade materials going into city. So at this stage, the only estimates that I make on gold production is the one that I get seconds after I receive the production sheets of the morning smelt, they are all after effect and on that we base the costs for the next foreseeable week or two weeks or month. But what I can say though is that we did see a 21% swing in gold production between March and April so the CIL circuit is behaving and it's behaving the way that it used to. Okay, the first question is what is the long term growth plan? Has Ergo has a life span? Ergo is running at pretty much full capacity so when we talk about growth within the context of Ergo we don’t talk about growth in production we talk about extending the life of Ergo. The additional 15% recovery efficiency is what is going to unlock a failure substantial portion of our resources and extend that life for as long as the gold price and technologies are mutually supportive. Off that footprint often improved recovery profile we can definitely extend the footprint, the existing footprint a little…