JOHANNESBURG () -- Gold producer DRDGOLD [Nasdaq:DROOY] had concluded its purchase of the Top Star property in central Johannesburg, it said yesterday.
The landmark mine dump, which was the site of one of Johannesburg's last drive-ins, was sold by AngloGold Ashanti. The purchase price was not disclosed.
DRDGOLD plans to process the dump for gold, which was not extracted in the past, when it was uneconomic to do so. It is estimated to contain 5.1 million tons of material at an average grade of 0.78 grams a ton.
CE Mark Wellesley-Wood said last month that in the medium term, the group's subsidiary Crown Mines' future would depend on receiving approval for its application to mine the dump.
"It is a drive-in - if the tales are to be believed half of Johannesburg was conceived there - so it's a heritage site as a result!" Wellesley-Wood said.
"I think this is part of the "endowment" - this is where the positive side of the exchange rate kicks in for the economy. A lot more of our resources and reserves become viable - and that adds to jobs and growth."
A company spokesman said details of the application were being finalised with the minerals and energy department.
The group's results for the year to June, released yesterday a month after management discussed the operational performance, showed that the revenue contribution from South African operations overtook that from the Australasian operations.
This was partly because of improved production from the South African mines and a decline in production at Australasian mines and partly because of the restructuring of the group's holdings. It now owns 85% of DRDGOLD SA and 79% of Australian Stock Exchange-listed Emperor Mines [ASX:EMP].
"They are generating cash, and we are able to look at some expansion both at East Rand Proprietary Mines (ERPM) going into the lease area next door, and Crown buying further dumps to maintain its feedstock pipeline - so we're on a reasonably even keel in South Africa," Wellesley-Wood said.
Total revenue from continuing operations rose to R1.6 billion from R1.15 billion. DRDGOLD earned 62% of gold and silver revenue from South Africa and 38% from Australasia, against 37% from South Africa and 63% from Australasia last year. In the latest period, the South African operations returned to a cash operating profit from a loss last year while cash operating profits from Australasia halved.
In Australasia, there was remedial work at the west wall of the Porgera Mine in Papua New Guinea, bad weather and underground flooding at Tolukuma in Papua New Guinea, and a planned shutdown at Vatukoula in Fiji as the mine was reorganised.
"I've summed it up saying all three operations had their worst years in their respective mining histories. It doesn't get much worse than that he said crossing both fingers firmly!" Wellesley-Wood said.
Bloomberg quoted Wellesley-Wood as saying yesterday the group planned to raise production by a third this year, with a 50% increase in Australasian operations and a 25% increase in South Africa.
The group increased its headline loss to 108.4 cents a share from last year's loss of 70 cents a share. It held R488.6 million (US$64 million) in cash at end-June against R241.2 million (US$31.6 million) a year ago.
DRDGOLD on Nasdaq is currently up 4.63% in U.S. dollar terms to $1.31. With Classic Business Day.
