One of South Africa’s oldest companies strikes gold

DRDGOLD, one of South Africa’s oldest companies, has benefitted immensely from record-high gold prices.

DRDGOLD was founded in 1895 as Durban Roodepoort Deep Limited. Its name was only changed to its present-day form in 2004.

The company was listed in the same year as its founding, 1895, to gain access to capital, which it could use to build and expand its gold mines on the Witwatersrand.

DRD acquired Crown Mines in 1998 as it became one of the few remaining gold miners in South Africa.

Today, the company is a gold producer and specialist in recovering gold from the retreatment of surface tailings.

DRD is the only company in South Africa focused solely on the retreatment of surface gold tailings.

The company has two major production footprints. The first is the Far West Gold Recoveries operation to the west.

The second is Ergo Mining Proprietary Limited, a major surface gold tailings retreatment operation stretching from central Johannesburg to Ekurhuleni in the east.

In a trading update released on Thursday, 6 February, the miner announced that its earnings per share are set to skyrocket for the last six months of 2024.

For the six months through December 2024, DRD’s earnings per share and headline earnings per share are expected to row by between 60% and 70%.

This comes as the miner’s revenue is expected to grow by 28% due to a 26% increase in the rand gold price received.

In addition, the company sold marginally more gold in the half-year, from 2,535 kg in 2023 to 2,567 kg.

DRD also said it remains free of any bank debt as of 31 December 2024. 

The company has a R1 billion revolving credit facility with a R500 million accordion option and a R500 million general bank facility with Nedbank.

These facilities are in place to support liquidity in funding the company’s significant capital expansion programme, but they remained undrawn at 31 December 2024.

DRD is expected to release its full interim results on Tuesday, 18 February 2025.