3
Detailed operational review
CONTINUING OPERATIONS (ERGO)
Q1 2013 V Q4 2012
Gold production rose by 11% to 35 815oz, a consequence both of a 1% increase in throughput to 5 598 000t and of an 11% increase
in yield to 0.20g/t. While the former reflects continuing stabilisation in the operating performance of the Crown-Ergo pipeline and
completion of the closure of the Crown plant, the latter is a consequence of a significant improvement in the yield of material recovered
from the Cason Dump.
Cash operating costs were well contained to a 1% increase at R305 265/kg, notwithstanding two months’ payment of power utility
Eskom’s winter tariff – a 60% premium to the normal rate – and implementation of wage increases.
Operating profit increased by 51% to R173.7 million due both to the rise in gold production and a 6% increase in the average rand gold
price received to R446 783/kg.
Capital expenditure, 6% higher at R81.4 million, was directed mainly towards the flotation/fine-grind project, which is progressing on
schedule and on budget.
Q1 2013 V Q1 2012
Gold production was up 4% from 34 562oz as a result of a 7% increase in throughput from 5 231 000t, which was partially offset by a
5% decline in yield from 0.21g/t. Higher throughput reflects the positive impact of the Crown-Ergo pipeline coming on stream.
Cash operating costs rose 17% from R260 189/kg, due mainly to electricity price and wage increases as well as higher throughput.
Operating profit increased by 11% from R156.5 million, a consequence both of higher production and a 13% increase in the average
rand gold price received from R395 568/kg.
EXPLORATION
Exploration activity in Zimbabwe during the quarter remained focused on the John Bull, Leny and Ascot targets at Norton on Zimbabwe’s
Greenstone Belt, the KT target at Gweru and the Guinea Fowl River alluvial target.
Commissioning of the alluvial gold recovery plant at Guinea Fowl River has started, and we should be able to form a high-level view of
the potential of this asset by March 2013.
Over the next few months, we will evaluate the economic viability of a number of surface tailings dumps as a stand-alone circuit.
LOOKING AHEAD
Our two principal priorities for the foreseeable future remain to bring steady state to our consolidated Ergo circuit, and delivering on the
timeline of the fine-grind project. Our uranium feasibility study is continuing, and we await the outcome of testwork being done on our
behalf by Mintek.
Alongside all of this, there is also the continued subject matter of our sustainable development focus areas as reported earlier, specifically
that of water consumption and human and social development. Both of these will remain at the forefront of our strategic planning and
implementation. We invite all to access and read our sustainable development report which we posted on our website.
Niël Pretorius – Chief executive officer
25 October 2012