DRDGOLD ploughed cash from record gold prices into its capital growth programme spending R751.8m in the September (first) quarter.
Publishing its first quarter production report today, the group said cash on hand subsequently declined to R1.05bn as of September 30. Some R345.7m was also paid as per its final dividend declaration in June.
DRDGOLD did not disclose free cash flow generated during the period but said in notes to its production report that the high gold price “has increased liquidity and cash generated during the current quarter”.
The gold tailings miner plans to extend operations previously deemed non-viable at its flagship Ergo facilities to beyond 2040. It has also embarked on the second phase expansion of its Far West Gold Recoveries operation.
All in all, the company spent R2.2bn in capital expenditure during its 2025 financial year and estimates it will invest another R7.8bn in the medium-term to achieve its ‘Vision 2028’ strategy.
DRDGOLD reported solid first quarter adjusted Ebitda of R1,08bn, a 1% increase quarter-on-quarter amid a stable gold price of R1.94m per kilogram. This was despite an increase in operating costs, up 8% in rand terms to R179 per ton owing, in part, to higher energy costs related to power utility Eskom’s winter tariff regime.
Total cash operating costs increased 3% quarter-on-quarter to R955,086/kg.
First quarter gold production came in at 38,291 oz, 3% higher. DRDGOLD has forecast production for the current financial year to June 2026 at between 140,000 oz and 150,000 oz of gold at cash operating costs of approximately R995,000/kg.
The kicker will come in the current quarter as the moderated gold price of the July to September period came shortly before another burst in the metal’s performance. The gold price is currently at new levels of $4,232 per ounce or R2.36m/kg. Assuming spot for the quarter, this would be an increase of nearly 22%.
Shares in DRDGOLD increased an astonishing 32% to R52,82 per share in the past month. At a market capitalisation of about R45bn, the company has never been more highly valued.
When the company last pushed through record levels earlier this year, CEO of DRDGOLD Niël Pretorius cautioned investors. “Our share price is at record levels and, yes, I think DRDGOLD is worth buying but you need to do it through a professional investor – someone who understands the dynamics of the gold market,” he said.
“We could do really well but our share price could still lose between 5% and 15% in value because of global gold sentiment,”he said earlier this year when the stock had pushed through R30/share.
“Don’t use braai talk to inform your investment decision or take advice from your nephew who is a second-year economics student. Take your savings to a professional,” Pretorius said.
