DRDGOLD (DRD) Stock Forecast & Price Target

DRDGold Ltd has demonstrated a strong commitment to growth, with cash flow reinvestment increasing in response to a favorable gold price environment, contributing to an expected significant improvement in liquidity and free cash flow. The company reported a 1% quarter-over-quarter increase in gold sales, achieving 37,231 ounces, alongside a 5% increase in the average gold price, leading to an adjusted EBITDA of approximately R1,092.9 million (~$62.0 million). Furthermore, the firm's Vision 2028 growth strategy, supported by expected capital expenditures of around R7.8 billion (~$449.7 million), underlines the potential for significant expansion in operations, complemented by a record high gold price environment that has allowed for increased dividends.

The analysis indicates a negative outlook for DRDGold Ltd, primarily due to escalating operational costs, which include heightened labor expenses, increased electricity tariffs, and additional machine hire costs associated with site cleanup efforts. These rising costs have significantly contributed to an increase in all-in costs by 9% quarter-over-quarter to R781 million ($44.3 million), resulting in an all-in cost of R1,745,213 per kilogram or $3,079 per ounce, a 6% year-over-year increase. While gold prices remain strong, the unresolved wage dispute with labor unions adds an element of operational uncertainty that could further impact profitability.