Mineweb fragt verdattert, könnte es in diesem Quartal gar so weit kommen, daß Droopy mehr an Gold als an Aktienverkäufen verdient?
DRDGold shows how to generate far more cash from shareholders than from producing gold. [Blockierte Grafik: http://www.smiliemania.de/smilie132/00000285.gif]
DRDGold spends to reduce gold reserves and output 
By: Gareth Tredway
Posted: '20-JUN-06 15:00' GMT © Mineweb 1997-2004
JOHANNESBURG (Mineweb.com) -- Massive share issues have failed to result in growth for DRDGold’s production or resource base over the last six years. In fact, those indicators have shrunk dramatically, which is something of an indictment of [Anklage gegen] a management that can be relied upon to put a vigorous spin on virtually every one of its moves.
Since the financial year to end-June 2000, DRDGold has issued 195 million shares, and increased the total in issue by 160% to the current 316 million from 121 million previously.
Members of the management team are allowed to sell shares to shareholders without further reference to shareholders in terms of a resolution approved annually at the AGM that gives management the authority to issue as much as 15% of the company’s share capital in the financial year.
But despite the infusion of share since 2000, DRDGold’s gold reserves have nearly halved from 15.9 million ounces to their current 8.3 million ounces, a figure that should be expected to increase on a higher gold price when updated later this year. Resources have fallen from 90.61 million ounces to 46.1 million over the same period. The deep-level Argonaut project resources and ERPM extensions in South Africa should also boost this figure, though they will be comparatively expensive ounces to mine.
“Management’s philosophy is to continue to replace those (resources and reserves) at the lowest possible cost,” chief executive Mark Wellesley-Wood told investors at a recent JSE event. So, shareholders might well ask, when is this likely to happen? [Blockierte Grafik: http://www.smiliemania.de/smilie132/00000285.gif]
In a recent presentation, Wellesley-Wood said that all operations will be drilled "going forward", and that a lot more reserves and resources will be added.
According to Mineweb’s calculations, back in 2000 each share in DRDGold would have bought 0.88 of an ounce of gold in the ground (resources and reserves). At the end of June last year, the shareholder would have been counting on only 0.15 of an ounce per share.
Production too has fallen off sharply and steadily, from 1.1 million ounces in 2000 to 769,000 ounces in the year to June 2005, while current forecasts are for 360,000oz from SA annually and 260,000 ounces from Australasia, making the total 620,000 ounces a year. Australasia, it should be noted, does not mean Australia itself but, rather, Fiji and the politically troubled Papua New Guinea.
Big chunks of production have been removed due to the liquidation of the North West operations hit by an earthquake and abandoned last year. And the exclusion of West Wits and DRDGold operations before that have resulted in lower figures. This is despite the fact that the company has consolidated its South African mines in its financial reports of late and now reports 100% production from both Crown and ERPM, where previously only 40% of production was attributable.
In its recent results announcement of the quarter to end-March, the company announced that production had increased at its South African operations. “While gold production from the South African operations increased by 21% to 86,678 oz,” said the statement.
The increase comes about because the company included, for the full quarter, the full numbers from the South African operations, whereas before only 40% was taken into account for Crown and ERPM. The individual mines combined actually produced 94,106/oz in December, which means production was in reality 8.6% lower quarter on quarter rather than higher as so fulsomely reported. 
Spin rather than precision. [Blockierte Grafik: http://www.smiliemania.de/smilie132/00000285.gif]
Between 2003 and 2005, when a strong rand put heavy pressure on the margins of South African gold mines, DRDGold’s offshore operations in the Pacific region, helped generate cash flow that was absorbed in South Africa.
Now, in another recently-concluded deal, these international assets being injected into Australian-listed Emperor Mines, and DRDGold getting an effective 88% of the combined company. And this stake will be diluting shortly as a rights issue has been announced at the Emperor level, which will dilute DRDGold to just below 80%. DRDGold shareholders’ interest in these assets is effectively decreased and there will not be any cash flow from outside into South Africa. Not that this is likely to faze [stören] Wellesley-Wood and his team [Blockierte Grafik: http://www.smiliemania.de/smilie132/00000285.gif] who seem bent on moving to focus of operations (and minority interests) out of South Africa.
According to cash flow statements over the years, DRDGold burnt R691 million in cash at its operations from the 2000 financial year to end-June 2005, while share sales to directors and investors for cash totaled R2.2 billion over the same period.
This year, share sales have been slightly less dilutive, with the shares in issue moving up to 316 million by the end of March, an increase of 4% over the period. In the previous two financial years shares in issue increased by 27% each year, according the annual reports for those years.
However the latest quarterly production figures indicate that 349 million shares are "issued and committed" Ilja Graulich, a DRDGold spokesman, says this includes shares under the staff option scheme and the possible shares that would need to be paid to those holding DRDGold bonds, which mature shortly.
This Monday the company offered all bondholders the option to roll the bond over to 2010. Graulich claims that his company has the funds to pay those who do not wish to take out the new bond.
DRDGold also has two debt facilities of R100 million and $50 million respectively with undisclosed institutions. In April the company said it had already drawn down R163 million and repaid this by issuing 17.8 million new shares.
Current higher gold prices could well see the company actually generating cash from its operations rather than from addition to its share register in the current quarter. But how long can the gold bull run last? And where are those additional cheap ounces that Wellesley-Wood has bragged [prahlen] about?
http://www.mineweb.net/sections/mining_finance/568900.htm
