Interview mit CEO Schweinchen Schlau-Wutz von Durban Roodeport
from Miningmx.com, den 06.01.2006
DRDGOLD earmarks delivery, TSX
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Posted: Thu, 05 Jan 2006
[miningmx.com] -- A SINGLE day 17% gain in the value of DRDGOLD earlier this week perhaps served notice that the South African-Australian firm hadn’t quite lost its appeal as a company geared to the gold price.
“There seemed to be a mismatch between institutions that understood our transaction (last year DRDGOLD reversed its Australasian mines for shares in 45% Emperor Mines) and the retail guys who buy more on gut,” said DRDGOLD CEO, Mark Wellesley-Wood.
In December, DRDGOLD responded less to gold price increases than some of its peers, and it seemed investors were choosing Emperor Gold as a preferred entry point. But this year, some of the old spikiness, reminiscent of when it was more geared, crept back into DRDGOLD’s share price.
Volumes were nearly at 10 million shares per day in January compared to average trade of 3.29 million shares per day over the last three months. By January 4, the share ended Wednesday at $1.79/share. It started the year at about $1.45/share so there’s obviously renewed interest, less suspicion.
However, Wellesley-Wood, is doing all he can to remove vestiges of marginality. Having disposed of the North West province mines in South Africa last year, a misfiring Fiji mine, known as Vatukoula, could serve as the new problem child.
“We are concerned that this asset may replace the South African marginal assets as the group’s new cash drain,” said Steve Shepherd, an analyst for JP Morgan in a recent note. JP Morgan nonetheless upgraded its recommendation of DRDGOLD to neutral.
As a result, DRDGOLD shed about 300 jobs at Vatukoula. “It’s about trimming,” said Wellesley-Wood who adds that fleet upgrades and other on mine improvements such as better ventilation for the mine should make it more efficient. Its weakness as a mine, and that of Tolukuma, a mine in Papua New Guinea DRDGOLD also owns, will leave a mark on the company’s December quarter figures, however.
“I haven’t got the details yet, but the December quarter performances of Vatukoula and Tolukuma won’t be fantastic. Recent improvements we’ve made to both mines won’t be reflected,” said Wellesley-Wood.
Looking to 2006, Wellesley-Wood wants it to be a period of delivery. “DRDGOLD shareholders are fed up with surprises. You know, the ups and downs and to-ing and fro-ing.
“We’ve ironed out the bumps in the road and now the focus is turning ounces in the ground into shareholder value,” he said.
Notwithstanding recent repositioning of the group - it now stands to own 85% of Emperor Mines to match its 85% ownership of its South African mines - there is at least one more strategic shift on the way.
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“DRD SA hopes to step out of South Africa. We’ve looked at three potential deals in Africa. Two were hanging in the air prior to Christmas so we’ll revisit those. We’ll be cautious, step-wise,” said Wellesley-Wood.
“Things have been whizzing around Emperor Mines. We’ve had a few mid-cap companies come and talk to us. But by the end of 2006, Emperor hopes to approach the market with a deal that would justify a capital-raising and listing, perhaps in Canada.”
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