DRDGOLD: Health issue may be costly
DRDGold shares are benefiting from the rising gold price despite a disappointing dividend and operational challenges
DRDGold’s dividend of 5c/share was considerably less than last year’s 62c. But at least it continues a track record of an unbroken 10 years of dividend payments, which few other gold companies in SA can match. DRDGold, which extracts low-grade gold from old mine dumps, does not face the same challenges as the highly capital and labour-intensive deep-level gold miners. That’s a feature that offshore investors appreciate, and the shares are well traded on Nasdaq. The reason for the company’s old nickname of "the Roodepoort Rocket" from its predecessor, Durban Roodepoort Deep, was evident in the share price run up to R12.62 in July last year, which CEO Niël Pretorius warned at the time was not justified by fundamentals.The shares are now around 530c, up 26% in the past month. DRDGold is highly leveraged to a gold price recovery and gold prices have been gaining traction on concerns about rising tensions between North Korea and the US. But Sharps Pixley CEO Ross Norman says this surge i...
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