DRDGOLD’s quarterly update looks promising (JSE: DRD)
Gold production is now heading the right way
In recent times, DRDGOLD has been greatly assisted by a gold price that has been moving sharply in the right direction. Focusing on gold tailings is a tough business, as they have to process plenty of ore to extract any gold whatsoever. If yields drop, or if access to material becomes difficult, then DRDGOLD’s margins can come under significant pressure at lower gold prices.
Thankfully for the company, “lower gold prices” seem to be a thing of the past. In an operating update for the quarter ended March 2026, the quarter-on-quarter move in the average rand gold price was 13%. To be clear, “quarter-on-quarter” means we are comparing this quarter to the immediately preceding three months (i.e. to December 2025), not to the quarter ended March 2025 (which would be a year-on-year move).
A 13% jump in that price over just three months is juicy. And it would’ve been even juicier if gold sales had increased. Alas, there was actually a 6% decrease in gold sales despite a 6% increase in gold production. The announcement doesn’t go into detail on this unusual mismatch.
With higher production comes greater efficiencies. Cash operating costs per kilogram of gold decreased by 4%. This means that total cash operating costs increased by 5% vs. a revenue increase of 6%, leading to adjusted EBITDA jumping by 21% as they unlocked an increase in margin. Remember, even a small difference in growth rate between group revenue and expenses can do great things for the margin in a company like this.
Further good news can be found in the capital expenditure update, where there’s a 16% decrease in capex on a quarter-on-quarter basis. But it’s worth noting that capex has been at elevated levels over the past nine months, jumping from R1.2 billion to R2.3 billion on a year-on-year basis. They’ve been investing heavily in their key projects, a necessary step to secure production of gold. Capex has now peaked though, so the company will no doubt be relieved that the gold price supported them throughout the capex programme.
If you want to see what happens when the market washes away from you during a period of heightened capex, just look at names like Sappi (JSE: SAP) and Gemfields (JSE: GML).
To end off on DRDGOLD, the balance sheet looks fat and happy with cash of R2.3 billion (vs. R1.7 billion as at December 2025). Although they have debt facilities in place, the company is currently free of debt as they haven’t drawn down on them. This bodes well for dividends, with the share price closing 8.3% higher in response to this update.
Production is up at Jubilee Metals, but guidance is a mixed bag (JSE: JBL)
Production guidance is “under review” based on recent developments
Jubilee Metals has released an operational and production update for the nine months to March 2026. With total saleable copper production for the period up by 28.7%, they are making progress on their strategy.
Production at Roan more than doubled, up 112.8% from the comparative period. Commissioning of the expanded Roan copper concentrate facility is near completion.
At the Molefe Mine, although there was a significant increase in ore mined and transported to the Sable Refinery, the announcement talks about interim numbers rather than nine-month numbers. I’m not sure if that’s just a typo.
Production at the Sable Refinery increased by 27.4% year-on-year. This is why the jump at Roan was watered down to a group increase of 28.7%.
Guidance for the year is an unusual situation. The company notes that it is currently “under review”, but they don’t make it clear whether it will be going up or down. The positive factor is the fast tracking of the expanded stripping programme at Molefe Mine, expected to be completed by July 2026. The negative factor is the delay in the commissioning and ramp-up of the expanded concentrate dewatering circuit at Roan, with targeted production expected to be reached in May.
The issue isn’t whether Jubilee Metals is increasing its copper production. The debate is around whether they are increasing it quickly enough!
What are your thoughts on this company?
Quantum Foods flags double-digit growth (JSE: QFH)
This is despite a significant drop in average egg selling prices
People often talk about how food prices seem to head in one direction only. It certainly feels that way at the till for consumers, but the truth is that prices do sometimes go down.
In a trading statement dealing with the six months to March 2026, Quantum Foods noted that average egg selling prices fell by 9%. That’s good news for Eggs Benedict enthusiasts everywhere – like me!
Despite this, the company achieved HEPS growth of between 12% and 20%. The market would probably show some support for this if there was trade in the stock. Alas, liquidity is so thin that not a single share changed hands on the day.
As we’ve seen elsewhere in the poultry sector, the results were supported by important external factors like higher demand for poultry products in general, lower feed costs, and much less disruption from energy availability and avian influenza.
The egg business suffered a downturn in earnings as the price decrease more than offset the 4% increase in volumes. Thankfully, the feeds and broiler farming businesses registered an increase in earnings, while the layer farming business was stable. Earnings in the other African businesses are described as being significantly higher, with the exception of Mozambique.
It’s worth noting that head office costs increased in this period due to management incentivisation, so that’s something to look out for when the company releases detailed results on 22 May.
Things are going very well at Sibanye-Stillwater (JSE: SSW)
The latest quarterly update reflects incredible growth in earnings
With exposure to gold and PGMs as its primary commodities, Sibanye-Stillwater has enjoyed that rarest of rare things: an upswing in both commodity prices at the same time. At the right point in the cycle, these mining companies are basically a licence to print money.
In an operating update for the three months ended March 2026, Sibanye has delivered the incredibly happy news of a 371% spike in group adjusted EBITDA. Perhaps even more encouragingly, the positive contribution to earnings is across the group’s operations, rather than driven by just one area.
Prices have obviously played the major role here, with PGMs up 87% and gold up 49%. But you still need to get the stuff out of the ground, with a 2% increase in South African PGM production and stable local gold production. There was unfortunately a 5% decrease in production in the US PGM operations. Importantly, the US operation was profitable in this period, a huge swing from the losses seen a year ago.
In the recycling business, adjusted EBITDA jumped dramatically from under R200 million to nearly R1.6 billion. To put that in perspective, US PGM adjusted EBITDA was R777 million, or less than half of what they made from recycling. All of this pales in comparison to SA PGMs (R12.4 billion) and SA gold (R4.7 billion). It’s also worth touching on Century zinc, more than doubling year-on-year to R467 million.
The Keliber lithium project is an important strategic push by the business, with construction completed on schedule in this period. Negative adjusted EBITDA of R209 million is a feature of a development period – you have to spend money today in order to make money in future.
Trying to guess where these commodity prices will go is a risky game. There are myriad factors involved, ranging from jewellery demand in China (a key platinum driver) through to the more obvious stuff like catalytic converters and tariff risks. China is also a major factor in the lithium market, as are the supply and demand forces of AI-driven energy needs.
Sibanye can’t control external prices, but they can do their best to manage costs. Although all-in sustaining costs (AISC) per ounce was flat in the South African PGM business, it jumped by 15% in the South African gold business due to operating cost pressures and higher royalty taxes. The underground gold operations need to be managed carefully from a cost perspective.
The US PGM business needs to tighten up on costs, with AISC per ounce increasing by 14% year-on-year as production dipped. This is one of the hardest things about mining: when production falls, it’s a double-whammy as AISC inevitably increases and the margin per unit deteriorates.
With one quarter behind them, the company has left 2026 guidance unchanged. The share price closed 11.3% higher on the day.
Results of previous poll:
Nibbles:
- Wesizwe Platinum (JSE: WEZ) is still trying to catch up on financial reporting and lift the suspension on the trading of its shares. They’ve released a trading statement dealing with the year ended December 2025, noting that HEPS swung from losses to profits – an increase of between 171% and 191%. The range is more useful than the percentage movement, with positive HEPS of between 8.64 cents and 11.08 cents. Results are due for release on 8 May.
- Mantengu (JSE: MTU) has replaced the offtaker of its chrome. The legacy deal with RWE Supply & Trading seems to have had some difficult commercial terms around pricing, driving a negative impact on Mantengu’s numbers of R29 million in the previous interim period. The new deal with HMS Bergbau Africa (that sounds like the name of a ship!) has no such issue. Mantengu indicates that this commercial improvement should eliminate the recurrence of onerous terms, while delivering a route to market for Mantengu’s chrome.
- ASP Isotopes (JSE: ISO) announced that subsidiary Quantum Leap Energy has further boosted its brains trust with the appointment of Dr. Peter Fiske to the strategic advisory board. Dr. Fiske comes with a long and impressive CV in the energy space in the US. It’s true that the company is being dressed up for its IPO, but it’s just as true that there is genuinely an incredible amount of talent in the organisation.
