aus MINEWEB vom 24.02.06
Costs set to soar at Blyvoor
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JOHANNESBURG (Mineweb.com) -- A move into lower grade areas on
DRDGold’s Blyvooruitzicht gold mine in South Africa will see the
underground mine’s costs bubble to above R95,000/kg in future. But
management still sees value in the property.
Chief executive Mark Wellesley-Wood says that because of the
company’s bullish view on the gold price, the marginal mine will be
retained. “With that sort of basis the future potential for Blyvoor and its
value for shareholders is absolutely significant,” says Wellesley-Wood.
The gold price averaged a little over R91,000/kg in calendar 2005 and
below R85,000/kg in 2004. So far this year, however, it has averaged
around R108,000/kg, as the dollar gold price has been selling at 25-year highs.
In addition, the company has also dusted off plans for the Argonaut
Project, involving the possible exploitation of a resource striking 30
kilometres from the company’s East Rand Proprietary Mines (ERPM) in
the east to Durban Roodepoort Deep Mine in the west, and extending
from 2,800 metres to 5,000 metres below surface. I
t sounds expensive and underground mining in the area ceased some
40 years ago. The area lies immediately to the south of Johannesburg’s
central business district in an area that once was home to some of the
Witwatersrand’s first mines but which is now residential and industrial.
Others have considered mining in the area, but their ideas remained
little more than a glint in their eyes while prospective investors have been disappointed.
To counter the higher costs of underground mining, the company is
looking at boosting production from the surface dumps at its existing
mines and dump processing subsidiary.
Overall, Blyvoor produced 83,304 ounces in the six months to December
2005, compared to 81,209 in the previous six months to end-June. The
average cash operating costs including surface and underground was
R88,040/oz, up from R78,356 in the previous six months.
In Papa New Guinea (PNG), the company made a R96.6 million interim
cash operating profit from its 20% stake in the Porgera mine. This was
R30 million less than the previous quarter, due to lower production and higher costs.
Management has a large exploration programme planned for its
Australasian division, and A$15 million has been set aside for the next
two years. About A$7 million will be spent in PNG and A$8 million in Fiji.
The group spent a net R115.4 million in cash during the quarter, leaving
a cash balance of R137.8 million.