PDSNET Market Snapshot

DRDGOLD (DRD) was listed in 1895 and is the JSE's oldest listed company. It was followed by SA Breweries which was listed in 1897 and has now been acquired by Anheuser Busch. DRD is now a gold surface treatment operation which is at an all-in sustaining cost of extraction of just over R627247 per kilogram which compares to the average received gold price of R917996.

They are re-treating surface dumps which still have traces of gold that can be profitably extracted with modern extraction methods. The benefit of this type of operation is that it is far less risky than underground gold mining operations because it has far less union exposure and has none of the expenses or difficulties of an underground operation.

Its life and grade, and hence its profitability, are precisely known. The share tends to be volatile because it depends on the current price of gold, but the company has a debt-free balance sheet and strong free cash flows. A deal was concluded for Sibanye to swap out its surface dumps for an additional 265m DRD shares - which took Sibanye to a shareholding of 38%.

Then on 10th January 2020, Sibanye announced that it had exercised its option to increase its stake to 50,1% at a cost of R1086m. The CEO of DRD Gold, Niel Pretorius, wants to join up with other tailing projects on the West Rand to create a massive unified re-processing operation.

The company is building a 20mw solar and battery facility. In its results for the year to 30th June 2025 the company reported revenue up 26% and headline earnings per share (HEPS) up 69%. The gold price received was 31% up and operating costs were 8% higher. The company said, "Cash and cash equivalents were 150% higher at R1 306.2 million (FY2024: R521.5 million).

This was after accounting for cash applied to capital of R2 254.9 million (FY2024: R2 985.7 million), most of which related to growth capex, as well as dividends paid, lower at R431.0 million (FY2024: R731.7 million). At financial year-end, the company remained debt-free." In an update for the 3 months to 30th September 2025 the company reported gold production up 2% and the average gold price received up 1%.

The company said, "Revenue for the quarter remained stable in comparison to the previous quarter, increasing marginally by 2% to R2,254.9 million, mainly as a result of a sustained high gold price of R1,943,398/kg and an increase in gold sold to 1,158kg, increasing by 16kg quarter on quarter." In a trading statement for the six months to 31st December 2025 the company estimated that HEPS would increase by between 93% and 103%.

Technically, the share made a high of 2458c on 9th May 2023 and then began a downward trend. It broke up through its long-term downward trendline on 3rd July 2024 at 1673c indicating a new upward trend. That upward trend has accelerated with the rise in the US dollar price of gold to above $5000 per ounce.

It remains a volatile commodity share subject to the international gold price.

Vukile (VKE) is a real estate investment trust (REIT) trading on the JSE and the Namibian Stock Exchange. It owns properties directly, shares in other REITs, property in the UK as well as a growing portfolio of properties in Spain. 50% of its assets are in Southern Africa, mainly in retail, 46% in Spain and 4% in the UK.

Vukile has a policy of re-investing into its existing properties and has struck a deal with MTN, who have invested R80m to install fibre into 37 of its malls. Vukile has a R595m investment in Fairvest, a R1,3bn investment in Atlantic Leaf (34,9% which it is now in the process of selling) and a R790m investment in Gemgrow Properties, which they are trying to sell.

Vukile is probably one of the best REITs on the JSE and its share price has risen steadily over the 15 years, despite various setbacks. The CEO Laurence Rapp says that the company is selling its shareholding in other REITs and its UK assets to focus on portfolios in Southern Africa and Spain.

In its results for the year to 31st March 2025 the company reported revenue up 9,4% and net asset value (NAV) of 2239c per share, up 3,9%. The company's loan-to-value (LTV) is 40,95%. The company said the South African portfolio had, "Acquired flagship Bonaire Shopping Centre in Valencia Spain for EUR305 million at a yield of c.7.2% - Post year-end acquired Forum Madeira in Portugal for c.EUR63 million at a yield of c.9.5%.

Acquisition of four shopping centres in Portugal for a combined value of c.EUR260 million at a blended yield of c.8.9%." In a pre-close update on 29th September 2025 the company said that in the six months to 30th September 2025 occupancy was 99% and footfall increased by 3%. Like-for-like operating income rose by 8%.

In an update on the six months to 30th September 2025 the company reported net operating income (NOI) up 10,1% and trading density up 5,3%. The company said, "The growth momentum was achieved across all major categories and tenants, with the top 10 tenants (53% of GLA) growing by +5.7% and the balance, including SMMEs, increasing by +2.4%." In an update on November and December 2025 trading, the company reported November sales up 2,4% and December up 4,5% in trading density.

Vukile shares are trading on a multiple of 15,82 which still looks cheap to us. This share has been a good long-term investment. 

Pick 'n Pay (PIK) is a retail grocery chain with over 2000 stores, mostly in South Africa, but also in the rest of Africa. The company was started by Raymond Ackerman in 1967 and became the dominant grocery retailer over time, before being displaced by Shoprite/Checkers. Summers has once again resumed the role of CEO, following his stint at Pick n Pay as CEO between 1999 and 2007.

In its results for the 26 weeks to 31st August 2025 the company reported turnover up 4,9% and a headline loss of 59,77c compared with a loss of 136,6c in the previous period. The company reported, "Another strong performance from Boxer: Boxer's market leading 13.9% turnover growth (5.3% like-for-like) is testament to its position as South Africa's leading grocery discounter; Group profit recovery: The Group reduced its interim headline loss by 45.3% to R439 million." In a trading statement for the 52 weeks to 1st March 2026, the company estimated that its headline loss would increase by more than 20% compared to the loss of 61,54c in the previous period.

Technically, Pick 'n Pay was in a downward trend from 2016 and has lost substantial ground to Shoprite. On the latest results, it appears to be moving into a new volatile downward trend since March 2024. The link up with Mr. D and Takealot should help the company to catch up in the online shopping market.

The share remains risky, and, in our opinion, has not yet addressed all the underlying problems of customer shopping experience and staff motivation, but there are a few signs of improvement.  

Northam (NPH) is a fully empowered platinum mining company which operates in the Bushveld complex. In the current difficult legislative environment where the 3rd mining charter is regarded as unfriendly from an investment point of view, Northam is probably the only mining house which is buying up new properties.

It has come to an arrangement with Anglo American to exploit a property adjacent to its Zondereinde mine (the deepest platinum mine in South Africa). It has also bought Eland Platinum from Glencore for R175m which it intends to re-start at a cost of R2bn. On 29th October 2019, the company announced the acquisition of Maroelabult for R20m which is west of the Eland mine with an analogous ore body.

This has accelerated the bringing to production of Eland and required very little capital. With the Eland mine, Northam got a concentrator plant which can process up to 250 000 tons a month. In return, Glencore got the right to market all of Northam's chrome. Zondereinde is a deep-level mine which has all the problems associated with mining at depth, while Booysendal is a shallow mechanised mine which is much easier to manage.

Both mines are profitable, but the empowerment structure results in Northam always reporting a loss because of the preference dividend that must be paid. Once Booysendal is complete the company should generate strong cash flows. The appointment of Mcebisi Jonas (former South African Minister of Finance) and Jean Nel (previously CEO of Aquarius Platinum) as non-executive directors has significantly added to the strength of the board.

The company has the stated intention of doubling its workforce as it strives to become a major PGM supplier in the world. With plans to increase production of PGM's over the next few years to 1 million ounces, this is probably one of the better options in the industry. The PGM industry has been navigating significantly depressed PGM prices and high inflation, together with a raft of global geopolitical uncertainties and locally, Eskom load curtailment events.

In its results for the year to 30th June 2025 the company reported revenue up 6,9% and headline earnings per share (HEPS) down 14,4%. In a production update for the six months to 31st December 2025 the company reported PGM production up 3,7% and chrome concentrate production up 14,8%.

The company said, "Zondereinde is benefitting from logistics decongestion as a result of the ongoing shift of UG2 stoping from the western to the higher-yielding eastern portions of the mine, as well as an increase in mining productivity arising from focussed Merensky stoping in the Western extension." In a trading statement for the six months to 31st December 2025 the company estimated that HEPS would be between 1518,5c and 1529,5c compared with 61,1c in the previous period.

We recommended waiting for a clear break up through the downward trendline before investigating further. That break came in May 2025 with the rising PGM prices and the share was added to the Winning Shares List (WSL) on 23-5-25 at 14311c. It has subsequently risen to 36361c and we expect it to rise further.

But it remains a volatile commodity share.

Gold Fields (GFI) is a relatively high-cost international gold mining house with a single mine in South Africa - South Deep. South Deep was bought by Gold Fields in 2006 and it has struggled to make the mine profitable, pouring in a total of R32bn (R22bn purchase price plus R10bn in development costs) into it over the past 14 years.

Brett Kebble once described South Deep as, "The world's most expensive long drop...". South Deep is 3 kilometres deep and a very difficult mine with many technical complications, but it is the second largest unmined gold resource in the world - hence Gold Field's persistence. Gold Fields is working with an independent power producer (IPP) to build a 50MW project in SA.

The company has spent a total of $502m over the past two years to ensure that Damang and Gruyere (international operations) would produce 2 million ounces a year for the next ten years. South Deep now has R800m less in costs and R400m less in capital expenditure. The company is focusing on bringing the new Salares Norte gold mine in Chile into production.

On 11th July 2022 the company said that it would list on the Toronto Stock Exchange and that it would adopt a dividend policy of paying between 30% and 45% of profits out.  Its protracted investment in South Deep is definitely beginning to pay off with output expected to rise by about 25% over the next 4 years. On 12th August 2024 the company announced that it had acquired the remaining 50% of Osisko Mining for $1,57bn (R29bn).

In its results for the six months to 30th June 2025 the company reported attributable production up 24% with a higher gold price. The company said, "Normalised earnings for the six months ended June 2025 increased by 181% YoY to US$998m, or US$1.12 per share (H1 2024: US$355m, or US$0.40 per share), mainly driven by higher gold sales and higher gold prices received during the period." Goldfields also announced the acquisition of Gold Road resources in Australia for $3,7bn or R44bn.

In an operational update for the three months to 30th September 2025 the company reported attributable production up 6% and all-in sustaining costs down 10% at $1557 per ounce. The company said, "Post the quarter-end, Gold Fields completed the acquisition of Gold Road Resources and paid US$1.45bn (A$2.23bn),net of cash received, the special dividend paid by Gold Road upon transaction close and the disposal of the Northern Star Resources shares that were acquired as part of the transaction." In a trading statement for the year to 31st December 2025 the company estimated that HEPS would increase by between 110% and 123%.

The company said, "Group attributable gold equivalent production for FY 2025 of 2,438koz is expected to be 18% higher than the corresponding period in 2024". Technically, the share is volatile and subject to shifts in the international price of gold, but it has been in a strong upward trend over the past five years. It remains a volatile commodity play.