6-K
Drdgold Ltd (DRD)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 6-K
REPORT OF A FOREIGN PRIVATE
ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For August 2020
Commission File Number 0-28800
______________________
DRDGOLD Limited
Constantia Office Park
Cnr 14th Avenue and Hendrik Potgieter Road
Cycad House, Building 17, Ground Floor
Weltevreden Park
South Africa, 1709
(
Address of principal executive offices
)
______________________
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form
40-F.
Form 20-F
☑
Form 40-F
☐
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also
thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities
Exchange Act of 1934.
Yes
☐
No
☑
If ''Yes''
is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):
N/A
Attached to the Registrant Form 6-K filing for the month of August 2020, incorporated by reference herein:
Exhibit
99.1 Release dated
August 2020,
“TRADING STATEMENT
AND FURTHER
OPERATIONAL
UPDATE
FOR THE YEAR ENDED 30 JUNE 2020.”
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
DRDGOLD LIMITED
Date: August, 26 2020 By:
/s/ Riaan Davel
Name: Riaan Davel
Title: Chief Financial Officer
Exhibit 99.1
DRDGOLD LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1895/000926/06)
ISIN: ZAE000058723
JSE share code: DRD
NYSE trading symbol: DRD
(“
DRDGOLD
” or the “
Company
” or the “
Group
”)
TRADING STATEMENT
AND FURTHER OPERATIONAL
UPDATE
FOR THE YEAR ENDED 30 JUNE 2020
TRADING STATEMENT
In terms
of paragraph
3.4(b) of
the JSE
Limited Listings
Requirements, companies
are required
to publish
a trading
statement as
soon as
they are
satisfied, with
a reasonable
degree of
certainty, that
the financial
results for
the current
reporting period will differ by at least 20% from the
financial results of the previous corresponding period.
DRDGOLD is in
the process
of finalising its
results for
the year ended
30 June 2020
(“
Current Reporting
Period
”) and
shareholders are accordingly advised that the Company
has reasonable certainty that it will report:
●
earnings per
share (“
EPS
”) of
82.5 cents
per share
compared to
earnings of
11.8 cents
per share
for the
previous
corresponding period; and
●
headline earnings per
share (“
HEPS
”) of 82.4
cents per share
compared to headline
earnings of 10.9
cents per share
for the previous corresponding period.
The expected increases
in EPS and HEPS for
the Current Reporting Period compared to the
previous corresponding period
are due mainly to movements in,
inter alia
, the following items:
- Revenue
Revenue increased by R1,422.9
million, or 52%,
to R4,185.0 million (2019:
R2,762.1 million), as a
result of an increase
in
(i) Ergo’s
revenue by
R486.8 million
to R3,064.3
million (2019:
R2,577.5 million)
and (ii)
Far West
Gold Recoveries
(“
FWGR
”) revenue by R936.1 million to R1,120.7 million (2019: R184.6
million).
At Ergo the 33% increase
in the Rand gold price
received offset an
11% decrease
in gold sold, which was
as a result of a
3.0Mt decline in volume throughput to
20.2Mt, due mainly to the COVID-19
national lockdown in South Africa (“
Lockdown
”)
and interruptions in power supply from Eskom and the
City of Ekurhuleni. FWGR enjoyed its first full
financial year of Phase
I production, taking full advantage of the higher gold price.
- Cash
operating costs
The impact of the increase in revenue on earnings and headline earnings was moderated by an increase in cash operating
costs of R203.1
million, or 8%,
to R2,626.0 million
(2019: R2,422.9 million),
largely due to
the inclusion of
the additional
cash operating costs of FWGR for the full financial year.
The increase of 8% in cash operating costs is also reflective of the
total volume throughput increasing by 8% with the cash
operating costs per unit being stable at R100/t.
- Weighted
average number of ordinary shares
EPS and HEPS
increased notwithstanding the issuance
of 168,158,944 shares to
Sibanye Stillwater Limited at
an aggregate
subscription price
of R1,
085,590,116, on
22 January
- This
resulted in
the DRDGOLD
ordinary shares
in issue
increasing by 24% to 864,588,711
shares.
FURTHER OPERATIONAL
UPDATE
Shareholders are referred to the
operational update for the year
ended 30 June 2020 published on
SENS on 5 August 2020.
Further information in regard to DRDGOLD’s operations
is provided below.
Year ended
30 Jun 2020
Year ended
30 Jun 2019
All amounts presented in R million unless otherwise indicated
Rm
Rm
Revenue
4,185.0
2,762.1
Cost of sales
(2,937.9)
(2,553.9)
Cash operating costs
(2,626.0)
(2,422.9)
Movement in gold in process
3.1
32.6
Ongoing rehabilitation expenditure
(24.3)
(18.3)
Other operating costs including care and maintenance costs
(41.8)
(29.9)
Depreciation
(270.8)
(169.1)
Change in estimate of environmental rehabilitation recognised
in profit or loss
21.9
60.0
Retrenchment costs
-
(6.3)
Gross profit from operating activities
1,247.1
208.2
Other income
0.7
7.9
Administration expenses and other costs
(309.9)
(90.9)
Administration expenses and other costs excluding share-based
payment expense
(85.8)
(69.5)
Share-based payment expense
(224.1)
(21.4)
Results from operating activities
937.9
125.2
Finance income
109.8
58.3
Finance expense
(68.8)
(78.4)
Profit before tax
978.9
105.1
Income tax
(343.9)
(26.6)
Profit for the year
635.0
78.5
OPERATIONAL PERFORMANCE
Ore milled
(000’t)
26,280
24,439
Yield
(g/t)
0.206
0.197
Gold produced
(kg)
5,424
4,826
Gold sold
(kg)
5,437
4,783
Cash operating costs
(R/t)
100
99
Cash operating costs
(US$/t)
6
7
Cash operating costs
(R/kg)
482,417
499,749
Cash operating costs
(US$/oz
)
958
1,096
All-in sustaining costs*
(R/kg)
541,475
524,713
All-in sustaining costs*
(US$/oz
)
1,075
1,151
All-in cost*
(R/kg)
551,646
600,941
All-in cost*
(US$/oz
)
1,131
1,361
Sustaining capital expenditure
(164.2)
(22.5)
Non-sustaining capital expenditure
(18.5)
(331.2)
Reconciliation of adjusted EBITDA
Profit for the year
635.0
78.5
Income tax
343.9
26.6
Profit before tax
978.9
105.1
Finance expense
68.8
78.4
Finance income
(109.8)
(58.3)
Results from operating activities
937.9
125.2
Depreciation
270.8
169.1
Share-based payment expense
224.1
21.4
Change in estimate of environmental rehabilitation recognised
in profit or loss
(21.9)
(60.0)
Gain on financial instruments
-
(2.1)
Gain on disposal of property, plant and equipment
(0.7)
(5.8)
Retrenchment costs
-
6.3
Transaction costs
1.4
-
Adjusted EBITDA **
1,411.6
254.1
Rounding of figures may result in computational discrepancies
* All-in cost definitions based on the guidance note on non-GAAP
Metrics issued by the World Gold Council on 27 June 2013
** Adjusted earnings before interest, taxes, depreciation and amortisation
(“Adjusted EBITDA”) may not be comparable to
similarly titled measures of other companies. Adjusted EBITDA
is not a measure of performance under International Financial
Reporting Standards (IFRS) and should be considered in addition
to, and not as a substitute for, other measures of financial
performance and liquidity
- COVID-19
The Group temporarily halted its operations on 26 March
2020 pursuant to the announcement of the Lockdown.
The regulations
pertaining to
the Disaster
Management Act,
No. 57
of 2002,
issued by
the Department
of Co-operative
Governance and
Traditional Affairs
define gold
mining and
refining as
an essential
service and
therefore exempt
from
restrictions imposed by the Lockdown.
Despite this
exemption, and
in consultation
with the
Department of
Mineral Resources
and Energy
and organised
labour,
DRDGOLD only recommenced production
at its operations once it
was satisfied that the appropriate
measures and protocols,
to limit the risk of infection to staff and others,
were fully implemented and operational, as further detailed
below:
●
FWGR, with a relatively small footprint and with staff
living close by, was
able to restart operations on 4 April 2020; and
●
Ergo restarted operations on
9 April 2020, with
reclamation from a limited
number of sites continuing
through to the end
of
June. Ergo’s Knights plant only restarted operations
on 7 May 2020.
Due to both operations
being able to
resume production relatively
soon after the
commencement of the
Lockdown period on
26 March 2020,
DRDGOLD was able
to continue to
pay salaries and
wages on the
understanding with DRDGOLD
staff that
everyone was on duty and
on ‘standby at home’. During
the initial restart of operations
,
all returning staff were
volunteers and
had been cleared as medically fit to work.
DRDGOLD’s staff showed unreserved support for the hygiene,
social distancing and team and shift de-densification measures
implemented. The
Group’s infection
rate has
been low,
and the 50-bed
quarantine facility
which was
established at
Ergo is
presently vacant.
To
assist in
bringing urgent
relief to
people most
impacted by
the COVID
-19 pandemic
,
DRDGOLD’s staff
contributed R1.6
million through
salary sacrifices
to the nationwide
Solidarity Fund.
DRDGOLD further
funded and
participated in
an initiative
with Impophomo
Rushing Waters
and DRDGOLD’s
social development
partner, Umsizi
Sustainable Social
Solutions, to
distribute approximately 5,420 food-parcels to families in distressed
communities neighbouring DRDGOLD’s
operations.
Management continues to
manage the COVID
-19 pandemic risk
with no relaxation
of any of
its initial contai
nment measures
and protocols and through ongoing communication with
and motivation of staff.
- Liquidity
As at
30 June
2020, DRDGOLD
’s cash
and cash
equivalents was
R1,715.1 million
(30 June
2019: R279.5
million),
with a
revolving credit facility with ABSA Bank
Limited of R175 million, available
if needed. The Group remains
free of any bank debt
as at 30 June 2020 (30 June 2019: Rnil).
Liquidity is further enhanced by current high Rand gold
price levels.
The forecast
financial information contained in this announcement is the responsibility of the
directors of DRDGOLD, and such
information has not been reviewed or reported on by
the Company’s auditors.
The condensed consolidated reviewed provisional results for the year ended
30 June 2020 are expected to be published on or
about 1 September 2020.
Johannesburg
26 August 2020
Sponsor
One Capital