DRD Long TradeDRD Gold has finally broken out from the Cup and handle pattern
those like me sold at 2,800 High and the systematically bought
back physical silver Krugerrands with the profits. well done.
its time to buy gold again
DRD trade ideas
Our opinion on the current state of DRDGOLD(DRD)DRDGOLD (DRD) was listed in 1895 and is the JSE's oldest listed company. It was followed by SA Breweries, which was listed in 1897 and has now been acquired by Anheuser Busch.
DRD is now a gold surface treatment operation which is at an all-in sustaining cost of extraction of just over R627247 per kilogram which compares to the average received gold price of R917996. They are re-treating surface dumps which still have traces of gold that can be profitably extracted with modern extraction methods.
The benefit of this type of operation is that it is far less risky than underground gold mining operations because it has far less union exposure and has none of the expenses or difficulties of an underground operation. Its life and grade, and hence its profitability, are precisely known.
The share tends to be volatile because it depends on the current price of gold, but the company has a debt-free balance sheet and strong free cash flows. A deal was concluded for Sibanye to swap out its surface dumps for an additional 265m DRD shares - which took Sibanye to a shareholding of 38%. Then on 10th January 2020, Sibanye announced that it had exercised its option to increase its stake to 50,1% at a cost of R1086m.
The CEO of DRD Gold, Niel Pretorius, wants to join up with other tailing projects on the West Rand to create a massive unified re-processing operation. The company is building a 20mw solar and battery facility.
In its results for the year to 30th June 2024 the company reported revenue up 14% and headline earnings per share (HEPS) up 4%. Gold production and sales were down 5% while cash operating costs increased by 20% in rands. The company said, "We are now positioning to bring on stream by the financial year ending 30 June 2028 ("FY2028") a combination of reclamation sites designed to lift tonnage throughput to 3 million tonnes per month, and gold production to just over 6 tonnes per annum."
In an update on the 3 months to 30th September 2024 the company reported production up 7% and sales up 4%. All in sustaining costs fell by 5% to R933686 per kilogram. The company said, "Cash operating costs per kilogram of gold sold decreased by 4% from the previous quarter to R856,723/kg due to an increase in gold sold, despite an increase in total cash operating costs driven mainly by two months of winter tariffs which Eskom charges between June and August each year."
In a trading statement for the 6 months to 31st December 2024 the company estimated that HEPS would increase by between 60% and 70%. The company said, "Group revenue increased by R828.1 million, or 28%, to R3,802.3 million (2023: R2,974.2 million), as a result of a 26% increase in the Rand gold price received, and a marginal increase in gold sold from 2,535kg to 2,567kg."
Technically, the share made a high of 2458c on 9th May 2023 and then began a downward trend. It broke up through its long-term downward trendline on 3rd July 2024 at 1673c indicating a new upward trend. It remains a volatile commodity share subject to the international gold price.
DRD leading the resources pack and heading up R23.80DRD is looking like one of the better resources that are showing upside to come.
Despite the Expropriation Bill, Depsite the uncertainty with Tariffs and US pulling funding.
DRD looks to be the star child of resources.
Price>20 and 200
W Formation
Target R23.80
Our opinion on the current state of DRDGOLD(DRD)DRDGOLD (DRD) is the JSE's oldest listed company, having been listed in 1895. It has evolved into a gold surface treatment operation, focusing on re-treating surface dumps with traces of gold that can be profitably extracted using modern methods. DRDGOLD's all-in sustaining cost of extraction is just over R627,247 per kilogram, compared to an average received gold price of R917,996. The nature of surface treatment operations presents lower risk than traditional underground gold mining, as it has less union exposure and avoids the costs and challenges associated with underground mining. The company's profitability is more predictable, given the known life and grade of its operations.
The share is known for its volatility, largely tied to fluctuations in the international gold price. However, DRDGOLD has a debt-free balance sheet and generates strong free cash flows. A significant development occurred when Sibanye swapped its surface dumps for an additional 265 million DRD shares, increasing its stake to 38%. On 10th January 2020, Sibanye further exercised its option to increase its shareholding to 50.1% at a cost of R1.086 billion.
DRDGOLD’s CEO, Niel Pretorius, aims to join other tailings projects on the West Rand to create a massive unified reprocessing operation. The company is also building a 20MW solar and battery facility to enhance operational efficiency and sustainability.
In its results for the year ending 30th June 2024, DRDGOLD reported revenue up 14%, with headline earnings per share (HEPS) up 4%. However, gold production and sales were down 5%, and cash operating costs increased by 20% in rands. The company announced plans to lift tonnage throughput to 3 million tonnes per month and gold production to over 6 tonnes per annum by FY2028.
For the three months to 30th September 2024, DRDGOLD reported a 7% increase in production and a 4% increase in sales. All-in sustaining costs dropped 5% to R933,686 per kilogram. Cash operating costs per kilogram of gold sold decreased by 4% to R856,723/kg, despite winter tariffs from Eskom during June to August driving up total cash operating costs.
Technically, DRDGOLD's share price reached a high of 2,458c on 9th May 2023, before entering a downward trend. However, it broke through its long-term downward trendline on 3rd July 2024 at 1,673c, signaling a new upward trend. While the stock remains volatile, given its sensitivity to international gold prices, DRDGOLD’s debt-free position and stable operations make it an attractive, albeit risky, commodity investment.
Our opinion on the current state of DRDGOLD(DRD)DRDGOLD (DRD) is the JSE's oldest listed company, having been listed in 1895. The company is now focused on gold surface treatment operations, which have an all-in sustaining cost of extraction of just over R627,247 per kilogram. This compares favorably to the average received gold price of R917,996. DRDGOLD's operations involve re-treating surface dumps that still contain traces of gold, which can be profitably extracted using modern methods.
One of the main benefits of this type of operation is that it is far less risky than traditional underground gold mining. It has significantly less union exposure and avoids the high costs and operational difficulties associated with underground mining. The life and grade of the operations, and thus their profitability, are precisely known. However, the share tends to be volatile as it is heavily influenced by the current price of gold. Despite this volatility, DRDGOLD has a debt-free balance sheet and generates strong free cash flows.
In a notable deal, Sibanye swapped out its surface dumps for an additional 265 million DRD shares, increasing its shareholding to 38%. On 10th January 2020, Sibanye further increased its stake to 50.1% at a cost of R1,086 million. The CEO of DRDGOLD, Niel Pretorius, has expressed interest in joining up with other tailings projects on the West Rand to create a massive unified re-processing operation. The company is also investing in renewable energy by building a 20MW solar and battery facility.
In its results for the year ending 30th June 2024, DRDGOLD reported revenue up 14% and headline earnings per share (HEPS) up 4%. However, gold production and sales were down 5%, while cash operating costs increased by 20% in rands. The company stated, "We are now positioning to bring on stream by the financial year ending 30 June 2028 ("FY2028") a combination of reclamation sites designed to lift tonnage throughput to 3 million tonnes per month, and gold production to just over 6 tonnes per annum."
Technically, the share reached a high of 2458c on 9th May 2023 before entering a downward trend. It broke up through its long-term downward trendline on 3rd July 2024 at 1673c, indicating a new upward trend. However, it remains a volatile commodity share subject to fluctuations in the international gold price.
DRD: failing its 200-day?A price action below 1590 supports a bearish trend direction.
Increase short exposure for a break below 1560.
The target price is set at 1420 (just below its 38.2% Fibonacci retracement level).
The stop-loss is set at 1720 (just above its 78.6% retracement level).
Failing to break above its 200-day simple moving average (which acted as major resistance), might trigger some downside potential.
Our opinion on the current state of DRDGOLD(DRD)DRDGOLD (DRD) holds the distinction of being the Johannesburg Stock Exchange's (JSE) oldest listed company since 1895. It was followed by SA Breweries, listed in 1897, which has since been acquired by Anheuser Busch. Today, DRDGOLD focuses on gold surface treatment operations with an all-in sustaining cost (AISC) of extraction at approximately R627,247 per kilogram, contrasting with an average received gold price of R917,996. The company primarily engages in re-treating surface dumps, extracting trace amounts of gold left from previous mining activities using modern techniques.
This type of operation offers significant advantages, notably its lower risk compared to underground mining. It faces fewer challenges related to labor unions and avoids the high costs and complexities associated with underground operations. Additionally, the life and grade of its deposits—and consequently its profitability—are well-determined, contributing to its operational efficiency.
However, DRDGOLD's shares tend to be volatile, influenced heavily by the fluctuating gold prices. Despite this, the company maintains a debt-free balance sheet and robust free cash flows. A strategic move was made when Sibanye swapped its surface dumps for an additional 265 million DRD shares, increasing its stake to 38%. On 10th January 2020, Sibanye further raised its shareholding to 50.1% for R1,086 million.
CEO Niel Pretorius has ambitions to expand operations by integrating other tailing projects in the West Rand to form a large-scale unified re-processing facility. Additionally, the company is investing in renewable energy with the construction of a 20 MW solar and battery facility.
For the six months ending 31st December 2023, DRDGOLD reported a 12% increase in revenue and a 10% rise in headline earnings per share (HEPS). However, gold production declined by 7%, and gold sales decreased by 8%, although the average received gold price rose by 13%. The introduction of higher-grade material from legacy and clean-up sites and the commissioning of high-grade projects like the Valley Silts and Rooikraal sites provided some operational relief.
In the subsequent update for the quarter ending 31st March 2024, the company experienced a 3% reduction in gold production and a 4% decrease in gold sales. Nevertheless, the average gold price received increased by 5%, and the AISC in US dollars decreased by 4%. Notably, the 4L3 and 5L27 sites at Ergo Mining Proprietary Limited ("Ergo") were commissioned in late January 2024, marking significant developments in their operations.
Despite reaching a peak share price of 2458c on 9th May 2023, DRDGOLD's shares have since been on a decline. However, they are now poised potentially to break through the downward trendline. The stock remains a volatile commodity share, largely influenced by international gold prices.
$JSEDRD - DRD Gold: Will The Laggard Play Catch-Up?See link below for previous analysis.
Gold and JSE Gold gold stock have been on a strong run lately.
DRD clearly did not get the memo as the stock is trending up but very slowly comapared to its peers and with the tailwinds provided by the gold price.
When such a disconnect occurs, one needs to take a deep look into the fundamentals which is beyond the scope of this analysis.
From an Elliott Wave perspective;
The bull run from 864 to 2546 cps is in five wave for wave 1.
The bear from 2546 to 1200 is for wave 2.
The current rally is the early stage of wave 3.
I will maintain a bullish stance above 1200 though with low conviction.
Our opinion on the current state of DRDDRDGOLD, established in 1895, holds the distinction of being the Johannesburg Stock Exchange's (JSE) oldest listed company, a title it took over from SA Breweries, which was listed in 1897 and later acquired by Anheuser Busch. Currently, DRDGOLD specializes in surface gold treatment operations, boasting an all-in sustaining cost of extraction slightly over R627,247 per kilogram—a figure that is notably lower than the average gold price received of R917,996. The company's focus on re-treating surface dumps that contain residual gold allows for a less risky operation compared to traditional underground mining, given the reduced union exposure and absence of the challenges associated with underground operations. This method also enables precise knowledge of the life, grade, and profitability of the operations.
DRDGOLD's operations exhibit a degree of volatility, largely due to their dependence on fluctuating gold prices. However, the company maintains a debt-free balance sheet and robust free cash flows, underscoring its financial health. A significant development for DRDGOLD was the agreement with Sibanye, allowing for the exchange of surface dumps for an additional 265 million DRD shares, which subsequently increased Sibanye's shareholding to 38%. Further, on 10th January 2020, Sibanye exercised an option to raise its stake to 50.1% for R1086 million.
Under the leadership of CEO Niel Pretorius, DRDGOLD aims to consolidate various tailing projects on the West Rand to establish a large-scale, unified re-processing operation. Additionally, the company is investing in renewable energy with the construction of a 20 MW solar and battery facility.
For the six-month period ending on 31st December 2023, DRDGOLD reported a 12% increase in revenue and a 10% rise in headline earnings per share (HEPS), despite a 7% decline in gold production and an 8% decrease in gold sales. The increase in the average gold price received by 13% has partially offset these declines. The company has seen some relief in the latter half of 2023, owing to the commissioning of high-grade sites like the Valley Silts and Rooikraal.
Despite reaching a peak share price of 2458c on 9th May 2023, DRDGOLD's shares have since experienced a downturn, illustrating the inherent volatility associated with commodity shares, particularly those tied to the gold market. This volatility reflects the broader challenges and opportunities within the gold mining industry, influenced by global market dynamics and the price of gold.
Our opinion on the current state of DRDDRDGOLD (DRD), established in 1895, holds the title of the JSE's oldest listed company, with SA Breweries, listed in 1897 and later acquired by Anheuser Busch, following it. DRD operates as a gold surface treatment entity, boasting an all-in sustaining cost of extraction slightly over R627247 per kilogram, which is notably less than the average received gold price of R917996. The company focuses on re-treating surface dumps containing trace amounts of gold that modern extraction methods can profitably recover. This operation type is significantly less risky than traditional underground gold mining due to reduced union exposure and the absence of underground operation expenses and challenges. Its profitability is well-defined due to known life and grade.
The company's share price is subject to volatility, influenced by fluctuating gold prices. However, DRD maintains a debt-free balance sheet and robust free cash flows. A strategic deal with Sibanye increased Sibanye's shareholding in DRD to 38% through a swap of surface dumps for an additional 265m DRD shares. On 10th January 2020, Sibanye further raised its stake to 50.1% for R1086m. DRD Gold's CEO, Niel Pretorius, aims to consolidate various tailing projects in the West Rand into a large, unified re-processing operation. Additionally, the company is developing a 20mw solar and battery facility to enhance its sustainability.
For the fiscal year ending 30th June 2023, DRD reported a 7% increase in revenue and a 13% rise in headline earnings per share (HEPS). Despite facing challenges such as delays in obtaining a water use license and global supply chain disruptions, which postponed the commissioning of new sites, the company managed to perform within its guidance range. In the quarter ending 30th September 2023, gold production increased by 5%, with all-in sustaining costs rising by 3% and the average price per kilogram decreasing by 2%. Cash and cash equivalents saw a significant decrease due to dividend payments and investments in capital expenditures and the solar project.
Looking ahead to the six months ending 31st December 2023, DRD anticipates a HEPS increase of between 5% and 15%, with group revenue rising by 12% and operating costs by 14%. Despite reaching a high of 2458c on 9th May 2023, the share has been on a downward trend, reflecting its nature as a volatile commodity share influenced by the international gold price.
#DRDGOLD R14.00 a massive level- watch for reversalAfter reaching a high of R24.50 in May 2023, DRD has retraced right back to the change of polarity point and 200 week moving average (green). The level of R14.00 also happens to be the 61.8% fib retracement level joining the swing highs from May 23 and Swing lows from Sep 22. Putting this all together tells me that the 14.00 level is a high probability of leading to a reversal in price and i will be watching this closely in the week ahead for a long entry. Also note the divergence on the RSI which has not formed a lower low in tandem with price.
DRD Gold Back in Broadening WedgeDRD broke out of the broadening channel trapping many shorts, price rose sharply but then reversed sharply, classic action of price fueled by short covering. Now price presents with a failed daily cycle, the current uptrend can be expected to be halted at the resistance of the broadening wedge then turn down lower than recent lows to the median line of the Pitchfork.
The support of the broadening wedge would be interesting for a weekly cycle low, most hinges on what recessionary realities bring into the markets, there is expectation of all assets to take a hit.
DRD - Faked out..DRD Gold was looking very bullish when it broke out from the bull flag.. unfortunately this proved to be a fake out when to touched around 18.50 and then pulled back. Relooking at the stock now, we see that it is back in the range and potentially targeting horizontal support around 14.80. The new range now appears to be 14.80 - 18.50 and traders can look to try exploit this. Stops on the downside would be 14.40 as I would look to go long again either on the yellow downward TL, or even the blue upward TL should the price get there.
DRD Gold Laggard but ready to shoot up - R24.65W Formation is forming on DRD Gold.
It's been a slow process, considering how many gold stocks have been outperforming the index itself.
But we are seeing signs that it's nearly DRD Gold time to shine...
The price is close to the neckline which needs to breakout. We also need to see a confirmed close and strong move above the 200MA.
The target remains at R24.65
ABOUT THE COMPANY
1. Company Overview:
DRD Gold Limited is a South African gold mining company.
DRDGold Limited, also known as Durban Roodepoort Deep Limited, is a mid-tier, unhedged gold producer and a world leader in surface gold tailings retreatment.
The company was established in 1895 in South Africa, making it one of the oldest continuously operating mining companies in South Africa.
2. Operations:
DRD Gold's primary operations are centered around gold recovery from surface tailings.
The primary business of DRDGold is the reclamation and processing of residual gold from old mine dumps.
Their largest operation, Ergo Mining Proprietary Limited (Ergo), has a vast footprint on the western and eastern sides of Johannesburg, a region marked by many years of gold mining.
This area is known for having some of the most substantial gold deposits in the world.
3. Focus on Tailings:
The company is known for its expertise in the retreatment of gold-bearing surface tailings.
4. Location:
The company's operations are likely to be situated in the Witwatersrand Basin in South Africa, a region historically rich in gold deposits.
DRD Gold just gave the golden BUY signal to R25.00DRD Gold has had a troubling year.
It's dropped from May 2023 from R25.35 down to R15.00.
There've been two strong tests at R15.00 which has helped form a major bullish W Pattern.
We just need the price to move up to break above the Neckline.
Once that happens, the next target will be back to the highs around R25.00.
The short term Moving Averages confirm with 7>21. And now the price needs to jump above the main 200MA. Then it will establish a Bull Market.
Gold itself is looking VERY bullish as you would know from my previous analysis with Gold.
And so Gold stocks are definitely quite safe to buy rather than sell right now.
Investors might feel safe to start accumulating from around these levels. I would prefer to wait for a break above the 200MA.
DRDMedium term view. Buy at current levels or better (lower). Following multiple rejections of it's downward trend line, the share could be primed for a change of trend. As always, traders could consider the following if/when the share approaches the target: bank/take profit, partially scale out, adjust the stop-loss to protect profits. Time stop: 27 March 2024.
TRADING LEVELS:
Entry: 1700
Target: 2000
Stop-loss: 1555
Time for another run down for DRD? Price has been in a descending channel and the 200-day SMA has been acting as a dynamic support and resistance level.
Direction: Sell
Target: R15.34
Stop loss: R17.66
Risk/Reward: 2
Traders/Investors should always make their own analysis, the idea posted is just a guideline. Risk management is always your number one priority.
DRD Gold with possibilities of more downside movement?JSE:DRD tumbled from highs of R29.50 in July 2020 and faced a sell off until it found support around R8.80 and rallied to R25.46.
The high at R25.46 had a bearish reaction at the 76.40% Fib retracement level of the previous bearish phase and price has been painting a falling channel since then. With market gaps below current levels, we may see some more downward movement of the instrument with the closest gaps on the Daily time frame being at R14.50 and R12.30.
Price may find a temporary bounce to the R17.00 ~ R17.60 zone before continuing its journey to the downside to test the R13.00 ~ 13.80 zone, which aligns with the 23.80% where we might find some support to take the instrument higher.
Failure of this zone to support price may see the instrument tumbling to retest the lows around R8.80.
Above bearish sentiments will be off the table if the instrument can close and hold well above R17.80.
DRD - Bull FlaggingPotential bull flag currently being formed on DRD. Ideally, would like to see horizontal support at around 15.80 as being the price from which share price bounces as the range low - and from there, we hopefully see the bullish pattern play out. TP to the upside would be 25.42 and stop loss probably on a close below 14.50.
Our opinion on the current state of DRD.DRDGOLD (DRD) was listed in 1895 and is the JSE's oldest listed company. It was followed by SA Breweries which was listed in 1897 and has now been acquired by Anheuser Busch. DRD is now a gold surface treatment operation which is at an all-in sustaining cost of extraction of just over R627247 per kilogram which compares to the average received gold price of R917996. They are re-treating surface dumps which still have traces of gold that can be profitably extracted with modern extraction methods. The benefit of this type of operation is that it is far less risky than underground gold mining operations because it has far less union exposure and has none of the expenses or difficulties of an underground operation. Its life and grade, and hence its profitability, are precisely known. The share tends to be volatile because it depends on the current price of gold, but the company has a debt-free balance sheet and strong free cash flows. A deal was concluded for Sibanye to swap out its surface dumps for an additional 265m DRD shares - which took Sibanye to a shareholding of 38%. Then on 10th January 2020, Sibanye announced that it had exercised its option to increase its stake to 50,1% at a cost of R1086m. The CEO of DRD Gold, Niel Pretorius, wants to join up with other tailing projects on the West Rand to create a massive unified re-processing operation. The company is building a 20mw solar and battery facility. In its results for the year to 30th June 2023 the company reported revenue up 7% and headline earnings per share (HEPS) up 13%. The company said, "At half year we were trending strongly and, but for slow red tape in obtaining a water use license for an emergency spillage dam at Rooikraal and delays in the supply to FWGR of imported equipment and goods through the global supply line, we would quite comfortably have delivered into the higher end of our guidance range of between 160 000 and 180 000 ounces. These dynamics delayed commissioning of these two new sites to May 2023 and July 2023 respectively, and they are only now starting to reach steady state". Technically, the share made a high of 2458c on 9th May 2023 and has been declining since then. It remains a volatile commodity share subject to the international gold price.
DRD - Keep an eye on this bull flag..DRD reported decent results this morning and the technicals look to support the bullish case. Currently trading at the bottom of the range, this might be a good area to accumulate a few but more importantly, we would love to see this pattern play out with a break to the upside.
DRD Gold broken above the falling flag - BullishFalling Flag has completed on DRD Gold. It started on 9 May 2023, where the price came trickling down in a falling rectangle formation.
The price now has broken above, which signals high buying and demand liquidity.
This will push the price up.
Other indicators confirm:
7>21>200MA
RSI>50
Target 1 will be to R25.24 at the top of the pattern.
ABOUT THE COMPANY
DRDGold Limited, also known as Durban Roodepoort Deep Limited, is a mid-tier, unhedged gold producer and a world leader in surface gold tailings retreatment.
The company was established in 1895 in South Africa, making it one of the oldest continuously operating mining companies in South Africa.
The company primarily operates within the Witwatersrand Basin, located in the province of Gauteng, South Africa.
This area is known for having some of the most substantial gold deposits in the world.
The primary business of DRDGold is the reclamation and processing of residual gold from old mine dumps.
They specialize in the recovery of gold from surface tailings.
Their largest operation, Ergo Mining Proprietary Limited (Ergo), has a vast footprint on the western and eastern sides of Johannesburg, a region marked by many years of gold mining.
DRD: time to consider a long position?Remains a risky trade.
A price action above 1980 supports a bullish trend direction.
Further bullish conformation for a break above 2100 (upper range of the declining channel pattern).
Alternatively, a pullback might occur.
The target price is set at 2240.
The stop-loss price is set at 1880.
Upside price momentum (see the lower panel) is applicable.
