DRDGOLD Limited (DRDGF) Q1 2015 Earnings Call Transcript
Published at 2014-10-23 00:00:00
It's Leroy from RMB Morgan Stanley. My question relates to the cost escalations. On a rand per kilogram basis, it's quite an achievement. But my concern is that, that's driven mostly by the yield enhancements. And if you look at it on a rand per tonne basis, it's about 10% increase between the previous quarter and this quarter. What would be the driver behind that? And then my other question is if we assume that the test work on the high-grade circuit is completed and satisfactory by December and we then reimplement in January, would there be a ramp-up phase? Or would you almost get the yield enhancement immediately from day 1? Daniël Pretorius: Well, remember that the only lockup that occurs -- I'll deal with your second question first. The only lockup that occurs, occurs in the system as it currently is. And that system is saturated. It's just that it's operating at a slower rate because it's only running 1/3 of its capacity. So there won't be additional lockup and the throughput would be immediate. Is that correct, Jaco? It was my understanding. But in anyway so far as your second question is concerned, that's really just the additional cost associated with the float and the fine grind. It does bring an additional cost. And obviously, you're running at full cost, notwithstanding the fact you're only running at 1/3 of its capacity. But once you switch it on, there's no half measures. It runs at full cost.
[indiscernible] Daniël Pretorius: Yes. That's another one. We had the -- we had 1 month of winter tariff. But obviously, that was -- it was an overlet between winter tariff in the first month and our labor increases come though as well. But I think the cost that you see on a rand per tonne basis, I don't think there's going to be a much of a reduction in that, except obviously when the tonnes increase, and you would've noticed that our tonnes were slightly lower this quarter than last quarter, about 100,000 tonnes. There is an additional cost associated with the float and the fine grind. Anything else?
I'm Dineo from Business Report. I'd like to find out if you can just update us on your talks to get your hands on richer mine dumps around the neighboring areas where you operate. Daniël Pretorius: At this stage, we're not engaging with anybody. Insofar as richer or smaller dumps are concerned. We do have one landowner, who's delivering high-grade material into the City Deep plot. And they'll continue to do that for the foreseeable future. The grades are still consistent with what we had wanted. It's not an enormous quantity, but it's a nice, little sweetener. But we're not engaged in any other discussions for smaller dumps at this stage. Are we all done? Okay. Thank you very much, everybody, appreciate your attendance.