GOLD producer DRDGold planned to refocus on the profitability of its South African mines, it said on Thursday, after reporting a sharp fall in production and profits both from its discontinued Australasian operations and its South African mines.

The group also plans to wring profits from reviving gold and uranium mining at some of its discontinued West Rand assets by putting them into a joint venture company, Kgosi Mining, with two partners. The joint venture, which would initially list a portfolio of West Rand mines on the Australian Stock Exchange to raise $6m, and subsequently on the JSE, consists of DRDGold and Mintails SA with 45% stakes each, and Minerals & Mining Reclamation Services, with 10%.

In the March quarter, DRDGold’s attributable gold production from its Australasian assets, which it holds through a 79% stake in Australian-listed Emperor Mines, fell 21% to 28009oz compared with the December quarter, while production from SA fell 14% to 75330oz. The figures exclude the Vatukoula mine in Fiji, which was closed in January and has been sold to Westech, and the 20% stake in Porgera in Papua New Guinea, sold to Barrick Gold.

DRDGold said production from its remaining Papua New Guinea mine, Tolukuma, was affected by slower progress than expected on issues like ventilation and stope drilling capacity.

In SA, Blyvooruitzicht lost about 60kg of production from the slow return of workers after the Christmas break and a five-day illegal strike, while at ERPM faulting has resulted in a decline in grades. But lower underground production from Blyvoor and ERPM was partly offset by higher surface production.

Crown, the recovery operation, performed in line with expectations, but production will continue to decline until the 3L2 and Top Star reserves can be accessed.

DRDGold has acquired the Top Star dump south of Johannesburg but plans to extract the gold have been delayed by its being declared a heritage site, a decision DRDGold is appealing against. CE John Sayers said on a conference call that the administrative appeal process could take three to nine months.

Group revenue fell 6% to R514,9m for the March quarter and cash operating profit dropped 29% to R58,5m. After the sale of the Australasian assets, DRDGold will show about $80m on its balance sheet in four to six months, and during that period will carry out feasibility studies on its other projects. Sayers said DRDGold “may well” need external funding for these projects but it depended how it approached the issue with Emperor Mines.

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