DRDGold Limited DROOY

comment on latest quarter

[tavistock]

Q3-FY08 Results: Roughly In-line

DRDGOLD (JSE: DRD) announced Q3-FY08 results.

• Production Down Q-on-Q - Q3-FY08 gold production was 70.4 Koz (52 Koz
attributable), down 13% on Q2-FY08 and 3% lower than our forecast.

• Gold Price Rescues Financials - Record gold prices meant Q3-FY08 revenues
were 20% higher than Q2-FY08; operating profits more than tripled. EPS only
improved 12% Q-on-Q due to exception profits on sale of investments in Q2.
Higher unit costs on lower volumes resulted in EPS underperforming our
forecast by 5%.

Given that context, the on-going South African electricity crisis and the fact that ERPM
has been exhibiting declining production and rising costs for several quarters,
management has bravely taken the necessary but painful decision to rationalize ERPM.

We believe this to be the right course in re-establishing DRD as a true gold price play. As
such, we maintain our positive view and Sector Perform, Speculative Risk ratings on the shares