[DRD] update

At the backlink I modeled that a peak was in place and to look for one of two final sell offs which would mark the end of the bear market in M+M.  This is coming folks and when it does I believe it will take most people by surprise.  Why?  Because they have been herded into forgetting that gold is money and nothing else is by rocks in the head pet rocks articles.  In any case below is the model from the backlink.



Below is the current chart.  I think that my primary model above in red has already bottomed below.  I think that the lows are now in and that we should soon be seeing some nice moves upwards in the miners.  A lower low than red 2 busts this count but then I think it will probably morph into a double bottom with a vee right cheek because the left one was rounded.  In any case, I model that rising wedge as a leading diagonal, the first wave of a new bull market.




Remember what Goldman recently said about value investing and how they think it will come back into style soon?  Well, look at the dividend from DRD below.  After nearly 1 year of hunkering down and conserving cash to fund their operations upgrade and to weather the gold price crash, they have quietly started it back up not at 1% or 3% but at nearly 5%.  Thinking people will be wondering how tiny little DRD has the confidence to pay out a divvy when the market is calling gold a pet rock. I guess DRD mgt are not buying the pet rock story and neither am I.



And they did this with an extremely conservative payout ratio of only 11.50%.  That means that they are adding almost 90% of their profits to their cash pile  which is a net 20 million after subtracting debt.  This company has recently upgraded its recovery efficiency with new equipment and that new investment is now making them profitable.  And they are doing this when the price of gold is at a 5 year low.  That, fellow gamblers, is a conservative, value oriented company.  Conservatism and value investing go hand in hand and my socionomic models have been calling for a swing back toward conservatism in the markets for a good bit of time now.













But that's not all.  Back in Feb of this year, DRD announced the following:"DRDGOLD announced earlier this month its intention to further expand capacity at Ergo which, less than a decade ago, faced closure and irreversible dismantling of its infrastructure. In a R23 million project expected to be completed by September this year, five tanks in the Ergo plant’s CIL circuit will be refurbished and recommissioned to increase throughput of gold tailings by 300 000tpm to 2.1Mtpm. The project will be financed from internal cashflow from the retreatment of the 21Mt Van Dyk tailings dam, part of DRDGOLD’s 11Mt, central Witwatersrand-based total resource.".

So these guys are actually growing production while others are selling stuff off.   And they are not doing it on debt.  I assume that the divvy suspension was used to pay for this project that is likely just recently completed whose goal was a 15% increase in throughput.  This is apparently how they were able to do it from "internal cashflow".

Because of the foolish notion that gold is a pet rock, they hated DRD at $1.10 and they aren't showing much love at $1.56 (today's price) either.  I want to be on record as saying that they are going to love it at $8 (minimum price target) within 24 months.