It’s earnings season on the JSE. At least 46 more companies are set to report financial results before the end of February. But two small cap gold miners have just reported results – and boy do they look good.

DRD Gold – profits grow 15% and shareholders receive a dividend

DRD grew revenue for the six months ended December 2023 by 12%, while operating profit is up 15% from R792 million to R909 million! Earnings per share increased from 62.3cps to 68.4cps. The company also declared an interim dividend of 20cps.

The share price is around R13.55 – so these results put the stock on a PE ratio of around 10 – with its rolling 12-month dividend yield at 6.27%.

The company managed these results despite missing out on around 90kg (or R100 million) worth of gold production due to delays in receiving water use licenses for new areas opened in 2023.

The company also invested in a mammoth solar power plant, with battery storage, that will be completed in October 2024 – and will start contributing to its bottom line this year.

I expect higher production in the coming twelve months, and lower production costs. And that means an even bigger increase in profits is on the way…
Red Hot Penny Shares readers made + 519% on this gold stock pre-covid. And that’s why it’s on my watch again.

Pan African Resources – Production and profits are up on this gold miner – as costs decrease

Pan Af released results for the six months ended 31 December 2023.

The company saw gold production increase from 92,307oz in 2022 to 98,458oz in the latest six month period. Production costs decreased from $1,291/oz to $1,287/oz during this period. And the company’s tailings retreatment facilities produced at super low production costs of $894/oz.

These figures are all great – and they contributed to the company generating $27.2 million in cash compared to only $11.6 million the year before!

Earnings per share came in at 42cps for the six months. Annualised this puts the stock on a PE ratio of only 5.

But the big gains are about to come with major new projects coming online in the next twelve months. The company’s MTR project will add around 50,000 ounces new production at $900/oz to its bottom line. This project is in budget and on schedule, and steady state production is expected by December 2024.

Then there’s the company’s expansions at the Evander mine. It is adding a refrigeration plant and equipping a ventilation shaft that will give it access to a new mining area, as well as improve efficiency at an existing one.

What’s more – the company is commissioning a 8.75MW solar plant at its Fairview mine in June 2024. This will reduce its dependence on Eskom and generate handsome returns as well.

Pan Af has been one of my favourite penny stocks over the years. I have recommended it many times time racking up returns of 47%, 144% and 274% over the years. This year I believe Pan Af is definitely a stock to keep an eye on.

These gold miners are completely dependent on the gold price

These smaller gold miners are only gold producers. As such any changes in the gold price affect them. Even a small increase in the gold price (or the rand weakening to the US dollar) stands to increase their profitability big time.

There are calls for gold to hit $2,200 this year… If it does these stocks are going through the roof. If you want to stay on top of what’s happening with these gold miners and other JSE small caps then join my community.

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