DRDGold expects earnings drop as high input costs bite

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Higher-than-inflation increases for diesel, steel and chemicals have contributed to an expected decrease in headline earnings

SA gold producer DRDGold expects headline profit to decrease by up to a third for the full year to end-June, weighed down by a lower rand gold price and an increase in input costs from diesel and chemicals.

DRDGold comprises two subsidiaries — Ergo, about 50km east of Johannesburg in Brakpan, and Far West Gold Recoveries, near Carletonville, west of Johannesburg where it uses chemical processes to recover residue metal from the retreatment of surface tailings left over from mining.The company managed to exceed the upper limit of its production guidance for the year, producing 183,900oz of gold against a guidance of between 160,000oz and 180,000oz.

The group said increases in costs at both operations were mainly caused by above-inflation increases in the costs of key consumables such diesel, steel and cyanide.

 

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