The steady rally in gold due to the continued economic uncertainties has been one of the stories of the year so far and that has been a big boost for gold stocks as well. One of the notable gainers among gold stocks this year has been DRDGOLD (NYSE:DRD) (JSE: DRD), which has gained as much as 180% since hitting its lows in March. In light of such significant gains, it could be a good idea for investors to have a closer look at DRDGOLD.
$1 Billion Market Cap
Towards the end of October, the Chairman of the South African gold producing company Geoff Campbell revealed that DRDGOLD hit a market capitalization of $1 billion in the 2020 fiscal year. It is a significant development for the company which continues to be one of the biggest operators in its industry in South Africa.
The company is also the leading player in the surface retreatment space in South Africa. Campbell stated that DRDGOLD has successfully built up its knowledge base and skills that will help it in moving massive tonnage efficiently.
He went on to state that the company has managed to achieve the market cap despite the challenge of the volatile political situation in South Africa and the coronavirus pandemic.
While the milestone of hitting the $1 billion market cap is important, Campbell was quick to add that significant investment to be made by DRDGOLD in the future is going to depend on the political situation in South Africa. He added that the possibility of land expropriation without compensation is a factor as well. It should be noted that DRDGOLD managed to generate $95 million worth of profits in the financial year 2020 and free cash flow stood at $56 million.
Gold Production Boost
Last month the company made another major announcement that must have further fuelled the excitement among investors. DRDGOLD announced that its gold production went up by as much as 45% sequentially.
On the other hand, the gold that had been sold by the company in the quarter soared by as much as 60% sequentially. The higher production and higher sales also resulted in a substantial drop of 10% in the operating costs for producing a kilo of gold.
Such a performance also helped DRDGOLD in boosting its adjusted EBITDA to rise by as much as 110%. It could be a good idea for investors to keep track of the stock over the coming weeks.
Neither PSN nor its owners, members, officers, directors, partners, consultants, nor anyone involved in the publication of this website, is a registered investment adviser or broker-dealer or associated person with a registered investment adviser or broker-dealer and none of the foregoing make any recommendation that the purchase or sale of securities of any company profiled in the PSN website is suitable or advisable for any person or that an investment or transaction in such securities will be profitable. The information contained in the PSN website is not intended to be, and shall not constitute, an offer to sell nor the solicitation of any offer to buy any security. The information presented in the PSN website is provided for informational purposes only and is not to be treated as advice or a recommendation to make any specific investment. Please consult with an independent investment adviser and qualified investment professional before making an investment decision.