DRDGold expects to meet its full-year production guidance after a stronger fourth quarter, the group said on Thursday.
The company’s latest trading statement offered some reassurance to stakeholders after it had previously said it might miss production guidance for a second consecutive year due to heavy rains in the third quarter.
This enabled DRDGold to fully capitalise on record gold prices, boosting the group’s liquidity and lifting headline earnings.
The SA miner said it expected headline earnings per share (HEPS) for the year ended June to be 252.4c-267.8c, up 64%-74% year on year.
Gold sales from the group’s Ergo operation were down 4% due to lower grades, while sales at Far West Gold Recoveries (FWGR) edged down 1% from the previous year.
Overall, the group recorded a 3% slip in sales, but this was more than offset by a 31% jump in the rand gold price, with revenue expected to be 26% higher than the previous financial year as a result.
The group recorded a capital expenditure bill of R2.25bn, mainly driven by ongoing projects at FWGR, including the construction of a regional tailings storage facility and the expansion of its Driefontein 2 Plant.
As the commissioning of reclamation sites and a solar plant at Ergo came to an end, the firm’s capex was down 24% from the previous financial year.
A lower capex, coupled with the soaring gold price, helped boost liquidity and keep the company free of any bank debt. DRDGold reported a net cash position of R1.3bn, more than 150% higher than at end-June 2024.
The spot price of gold has soared more than 36% over the past 12 months as investors and central banks continue to flock to the safe-haven metal. The metal is expected to continue rallying in the coming months as US tariffs, policy uncertainty and geopolitical conflict spur risk-off sentiment.
According to its latest commodity market outlook, the World Bank expects gold prices to rise by 36% this year to an average of $3,250/oz, before softening slightly to $3,200/oz in 2026.
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