South Africa region

KDC

Gold production increased from 272,500 ounces (8,475 kilograms) in the June quarter to 279,200 ounces (8,684 kilograms) in the September quarter. This increase was achieved despite the lost production due to the wage-related industrial action, safety stoppages and interventions following seismic-related events.

Underground tonnes milled decreased from 1.27 million tonnes in the June quarter to 1.22 million tonnes in the September quarter, offset by an increase in yield from 6.0 grams per tonne to 6.2 grams per tonne. This increase was largely due to higher grades encountered on the western section of the mine as well as an improved recovery. Surface tonnes milled increased from 1.38 million tonnes to 1.58 million tonnes and the surface yield increased from 0.6 grams per tonne to 0.7 grams per tonne.

Main development decreased by 11 per cent from 11,740 metres to 10,460 metres, while on-reef development decreased from 2,040 metres to 1,475 metres. This decrease was due to the industrial action and the safety-related stoppages. The average development value increased from 1,991 centimetre grams per tonne to 2,150 centimetre grams per tonne.

Operating costs increased from R1,915 million (US$282 million) to R1,952 million (US$277 million). This increase was mainly due to one month of higher winter tariffs in the June quarter compared with two high winter tariff months in the September quarter, annual salary increases and higher surface-ore transport costs. Total cash cost for the quarter increased from R225,133 per kilogram (US$1,033 per ounce) in the June quarter to R227,395 per kilogram (US$1,003 per ounce) in the September quarter.

Operating profit increased from R862 million (US$127 million) in the June quarter to R1,432 million (US$204 million) in the September quarter.

Capital expenditure increased from R545 million (US$80 million) to R611 million (US$87 million) mainly due to timing of expenditure on various projects and an increase in ore reserve development.

Notional cash expenditure increased from R290,289 per kilogram (US$1,332 per ounce) in the June quarter to R295,164 per kilogram (US$1,302 per ounce) in the September quarter as a result of the higher capital expenditure. The NCE margin increased from 11 per cent to 24 per cent.

Beatrix

Gold production decreased from 98,000 ounces (3,048 kilograms) in the June quarter to 84,700 ounces (2,636 kilograms) in the September quarter due to safety-related stoppages and the wagerelated industrial action.

Underground tonnes milled decreased from 648,000 tonnes to 547,000 tonnes. The underground yield improved slightly from 4.5 grams per tonne to 4.6 grams per tonne. Surface tonnes milled decreased from 422,000 tonnes to 352,000 tonnes. Surface yield remained steady quarter-on-quarter at 0.3 grams per tonne.

Main development decreased from 6,682 metres in the June quarter to 5,442 metres in the September quarter. The on-reef development decreased from 1,673 metres to 1,182 metres due to the industrial action and the five day stoppage after the fatal accident caused by drilling into a misfire. The average main development value decreased from 1,325 centimetre grams per tonne in the June quarter to 1,109 centimetre grams per tonne in the September quarter and reflects the value variability of the zones currently being developed.

Operating costs were steady at R625 million (US$92 million) in the June quarter compared with R628 million (US$89 million) in the September quarter. Good cost control enabled annual wage increases and winter power tariffs to be absorbed. Total cash cost increased from R203,871 per kilogram (US$935 per ounce) to R236,002 per kilogram (US$1,041 per ounce) due to the lower production.

Operating profit increased from R385 million (US$56 million) in the June quarter to R427 million (US$61 million) in the September quarter.

Capital expenditure increased from R152 million (US$23 million) to R163 million (US$23 million) with the majority spent on infrastructure upgrades and ore reserve development.

Notional cash expenditure increased from R255,118 per kilogram (US$1,170 per ounce) in the June quarter to R300,228 per kilogram (US$1,325 per ounce) in the September quarter due to the decreased production. The NCE margin increased from 23 per cent to 25 per cent.

South Deep project

The South Deep capital infrastructure programme continues to meet its key delivery dates to support the build-up to full production of 750,000 ounces. The new tailings storage facility achieved first deposition in April this year and has now been commissioned. The ventilation shaft deepening project remains on track for commissioning in the September 2012 quarter and the additional rock hoisting will build to a nameplate capacity of 195,000 tonnes per month. This, together with the existing Main shaft capacity of 175,000 tonnes per month, will deliver the full production to the mill. The gold plant expansion from 220,000 tonnes to 330,000 tonnes per month is under construction, with commissioning planned in the September 2012 quarter. The capital development has achieved 105 per cent of planned metres year to date and capital expenditure is on track.

Gold production decreased from 76,100 ounces (2,366 kilograms) in the June quarter to 64,400 ounces (2,003 kilograms) in the September quarter mainly due to the wage-related industrial action.

Underground reef ore processed during the quarter decreased by 6 per cent from 419,000 tonnes to 392,000 tonnes, largely due to the wage-related industrial action as mentioned above.

Total tonnes milled, which included 108,000 tonnes from surface sources and 123,000 tonnes of off-reef development, decreased from 690,000 tonnes in the June quarter to 623,000 tonnes in the September quarter. The on-reef yield decreased from 5.3 grams per tonne to 5.0 grams per tonne mainly due to changes in mining mix.

Development decreased from 3,063 metres in the June quarter to 2,938 metres in the September quarter. The new mine capital development in phase 1, sub 95 level, decreased from 1,173 metres to 1,160 metres. Development in the current mine areas above 95 level decreased from 1,709 metres to 1,484 metres. Vertical development increased from 181 metres to 294 metres. De-stress mining increased by 23 per cent from 5,554 square metres in the June quarter to 6,815 square metres in the September quarter.

Operating costs increased from R533 million (US$79 million) in the June quarter to R550 million (US$78 million) in the September quarter. The increase was mainly due to increased electricity costs, with two winter tariff months in the quarter, and an increase in stores cost for maintenance of mechanised equipment. Total cash cost increased from R223,922 per kilogram (US$1,027 per ounce) to R271,842 per kilogram (US$1,199 per ounce) in the September quarter.

Operating profit decreased by 2 per cent from R245 million (US$36 million) in the June quarter to R240 million (US$34 million) in the September quarter due to the 15 per cent lower gold production, partly offset by the higher gold price received.

Capital expenditure increased from R472 million (US$69 million) in the June quarter to R492 million (US$70 million) in the September quarter, in line with the project plan. The majority of this capital expenditure was on development, the ventilation shaft deepening and infrastructure, the metallurgical plant extension, trackless equipment, as well as the full plant tailings backfill and new tailings dam facility.

Notional cash expenditure increased from R424,894 per kilogram (US$1,949 per ounce) in the June quarter to R520,369 per kilogram (US$2,296 per ounce) in the September quarter as a result of the lower gold production together with increased costs and capital expenditure.