DRDGold boss cautions investors as stock hits 23 year high

FORMER DRDGold CEO Mark Wellesley-Wood once famously dubbed the company the ‘Roodepoort Rocket’ because of the way in which the share price took off in response to a rising gold price.The reason was the highly marginal nature of DRDGold’s then largely underground mining operations, which shot up in value on a rising gold price. The downside was that the share price could – and frequently did – fall off a cliff when the gold price turned down.DRDGold was, in effect, a proxy for the gold price and that was something that always niggled at current CEO Niël Pretorius, on whose watch DRDGold has shut down all its underground mines – Durban Roodepoort Deep, ERPM and Blyvooruitzicht – and become a large-scale dump retreatment operation.Pretorius comments that “it all started with the Crown Mines retreatment operation when it became clear that Crown Mines was the most reliable source of cash flow in the group as the underground assets just became tougher and tougher to run”.But DRDGold’s reputation as the Roodepoort Rocket is still very valid in the minds of gold investors, despite the fact that they could lose a lot of money if they time their investments incorrectly.Pretorius actually warned shareholders against buying DRDGold shares back in 2020 – the last time the share price shot up – cautioning that trade in the volatile stock was best left to the professionals.Pretorius is sounding those warnings again with DRDGold having hit a 23 year high of R38,80 a share on the back of the gold price going above $3,600/oz. He comments: “Our share price is at record levels and, yes, I think DRDGold is worth buying but you need to do it through a professional investor – someone who understands the dynamics of the gold market.“We could do really well but our share price could still lose between 5% and 15% in value because of global gold sentiment,” he said earlier this year when the stock had pushed through R30/share.“Don’t use braai talk to inform your investment decision or take advice from your nephew who is a second-year economics student. Take your savings to a professional,” Pretorius cautioned.The post DRDGold boss cautions investors as stock hits 23 year high appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com