strong quarterly results expected

(Quarterly Results To Be Released on 22 April)

Reuters
UPDATE - S.African DRD expects good results at North West
Tuesday April 6, 8:35 am ET


(Adds details, shares)
JOHANNESBURG, April 6 (Reuters) - South African gold miner Durban Roodepoort Deep (DRD) (DURJ.J) has kept costs down at its North West operations, which will report surprisingly good quarterly results, a spokesman said on Tuesday.


"Things are looking very positive there ... You'll be very surprised what numbers North West is going to bring out," spokesman Ilja Graulich told Reuters.

DRD, the world's 11 biggest gold producer, laid off 3,000 workers last year and cut output at North West, which comprises two mines, because the strong rand was causing steep losses there. Its costs are priced in rand and gold sales in dollars.

The situation has improved sharply, with costs being kept below 80,000 rand per kilogram, he added.

"Things have continued positively; the guys are still working hard at getting productivity up and getting throughput up," Graulich said.

DRD shares jumped 2.4 percent to 21.50 rand by 1205 GMT from unchanged before the news came out. The South African gold mining index (^JGLDX - News) was up 1.2 percent.

Rival Harmony Gold (HARJ.J) said on Friday it might have to close six mine shafts due to the strong rand, but Graulich said DRD expected no further closures or retrenchments at current prices.

"Things in South Africa are fine. It's no great shakes, but we don't have to take any drastic action in terms of retrenchments or whatever at this stage," he said.

DRD reports its results for the three months to end-March on April 22. In the quarter to end-December, DRD moved into profit, reporting earnings per share of 3.9 cents compared with a loss of 24.4 cents in the previous quarter.

Its North West operations produced 81,632 ounces of gold during the December quarter, around a third of the firm's total output of 237,307 ounces. North West reported a reduced operating loss of 3.9 million rand compared with 41.8 million previously.

At DRD's Blyvooruitzicht mine, a task force was expected to agree on several additional ways to boost productivity by next week, Graulich added.

Last month, DRD said the eight-member task force, which includes management and trade union representatives, had agreed on an incentive scheme for rock drill operators.

DRD has been lessening its exposure to South Africa and the country's volatile rand with expansion in Australasia, which accounted for 28 percent of output in the December quarter.

The shares have staged a good recovery after hitting a low of 14.50 rand in December but are off a peak of 28 rand touched in January