Old but gold: DRDGold still digs profit from a century of dirt
Image: Gerd Altmann/Pixabay
A few years after the JSE was formed to list companies that were rushing to pull gold out of the mine after it was discovered in 1886, DRDGold listed on the bourse.
It's now the oldest company still listed, having offered its shares to the public in 1895. Its operations have shifted over time, and it is now pulling gold dust out of mine dumps, which were the result of more than a century of mining and dumping the left-over dirt on the edges of mines.
Initially, DRDGold, formerly Durban Roodepoort Deep, operated underground mines before transitioning completely from deep level underground mining to the large-scale retreatment of mine dumps and tailings dams.
Although there is no information as to how much its stock was worth when it listed, IOL's calculations show that a R10,000 investment into the company five years ago would have reaped an additional R3 708 if dividends were reinvested.
Although that's a return of 37.08% over the past decade, it's far less than the bourse's ALSI gain of 75.5% over the same period and worth only two-thirds of the average basket of household items based on May figures from the Household Affordability Index, published by the Pietermaritzburg Economic Justice & Dignity Group.
And, reinvesting dividends doesn't make much of a difference, because the total gain is only R3 582, a return of 35.83%.
The Pietermaritzburg Economic Justice & Dignity Group's report indicated that the national minimum wage in May, based on 21 working days, is R4 836. The average cost of a household food basket, in the same month, is R5 466.
In DRDGold's May press release on its operating performance for the quarter to end-March, it noted that it was celebrating its 130th anniversary of being listed.
CEO Niel Pretorius, said in the statement: 'The idea of rolling back mining's environmental legacy aligns with the values of our people. Our people are not only working for the next month or year, but they are also working for the next generation and towards a better future. This is what sustainability is all about.'
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Macrotrends' information indicates that the all-time high DRDGold stock closing price was 48.32 on March 11, 1997.
The discovery of gold on a Transvaal farm, Langlaagte, on the Witwatersrand in 1886 by two prospectors was a turning point in South African history. It changed South Africa from an agricultural society to become the largest gold producer in the world – although it has since lost this crown and isn't even in the top ten producers globally.
China is now in first place in terms of gold producers.
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