DRDGold's Quarterly Earnings Soar 65%

(REUTERS) -- DRDGold, South Africa's fourth-largest gold producer, said on Tuesday that second-quarter earnings climbed 65 percent as it continued to cash in on the higher gold price.

Headline earnings totalled 33 cents per share in the October-December second quarter, compared with 20 cents in the first quarter. Headline earnings, the main profit measure in South Africa, strip out certain one-off items.

Total gold production was virtually unchanged quarter on quarter at 63,659 ounces, but lower than the 69,446 ounces produced in the second quarter last year, with declining grades the chief culprit.

The company, which plans to exit underground mining, aims to increase its production by as much as 20 percent through the construction of a 250 million rand ($32.46 million) milling circuit at its Ergo's Brakpan plant.

Profit was buoyed by an 11 percent increase in the average rand gold price received to R437,316/kg.

Gold shot to an all-time high of $1,920.30 an ounce in early September and while US dollar gold prices have declined since then, the rand-per-kilogram price of gold has soared on the back of a weaker rand.

Spot gold stood at $1,716 an ounce by 0617 GMT.

DRDGold on Monday concluded a binding agreement to sell its 74 percent stake in the Blyvoor gold mine to another junior gold producer, Village Main Reef, for about 192 million rand in cash and shares.

The transaction, which was announced in November, will help DRDGold exit underground mining and concentrate solely on processing surface material.

Blyvoor produced 29,676oz in the second quarter and while this figure will be cut from DRDGold's future production once the Village deal is sealed, the company expects these ounces to be replaced by further expansion of its Ergo operations.

Shares of DRDGold are up about 24 percent so far this year, outperforming a 2.5 percent rise in Johannesburg's index of gold miners.