DRDGOLD Reports Improved Yield in Q1: Can it Sustain This Pace?

DRDGOLD Ltd. DRD experienced a marked improvement in gold recovery yield in the first quarter of fiscal 2026 (ended Sept. 30, 2025), which directly boosted production and earnings despite a decline in total ore throughput. This performance reflects strong operational control and efficient processing management across its retreatment operations.

DRDGOLD processed around 6.481 metric tons (MT) of material, about 3% lower than the fourth quarter of fiscal 2025, primarily due to weather disruptions and routine maintenance. However, the company achieved a 2% sequential increase in gold production, delivering 38,291 ounces of gold.

The key to this growth was a notable improvement in yield, which rose to 0.184 grams per ton (g/t) from 0.176 g/t in the fourth quarter of fiscal 2025, representing a 5% increase. This higher yield meant DRDGOLD extracted more gold from each ton of material processed, offsetting the impact of reduced tonnage.

This improvement underscores the company’s operational resilience and its ongoing efforts to enhance recovery efficiency through metallurgical optimization and improved plant performance.

In tailings retreatment operations like DRDGOLD’s, where ore grades are extremely low, even a fractional increase in yield can significantly influence profitability. The company’s ability to fine-tune its processes and recover more gold per ton demonstrates the effectiveness of its recovery circuits and process control systems.

Financially, the operational gains translated into stronger results for DRD. Revenues were reported at R2.25 billion (roughly $124.4 million) for the first quarter of fiscal 2026, a 2% rise from the previous quarter on higher prices and gold sales. Earnings before interest, tax, depreciation and amortization (EBITDA) grew 1% to R1.09 billion (roughly $60.3 million) on strong gold prices and enhanced recovery efficiencies despite a challenging cost environment.

Strategically, the yield improvement also reinforces DRDGOLD’s long-term position in the surface retreatment segment. Since the company relies on reprocessing historical mine dumps rather than conventional mining, optimizing recovery efficiency is central to sustaining profitability and extending the lifespan of its resource base.

Among peers, AngloGold Ashanti Plc. AU delivered a solid improvement in gold recovery yield. The company’s gold production increased 21% year over year to approximately 804,000 ounces in the second quarter of 2025, driven by higher recovery rates and optimized plant performance across its key operations. This yield improvement, meaning more gold extracted per ton of ore, helped offset grade variability and operating cost pressures. Supported by an average realized gold price of roughly $3,287 per ounce, AngloGold Ashanti converted its operational efficiency into stronger earnings and cash flow. The enhanced recovery yield highlights AngloGold Ashanti’s focus on process optimization and sustainable productivity.

Gold Fields Ltd. GFI experienced a 27% decrease in gold recovery yield, from 1.05 grams per ton (g/t) in the first half of 2024 to 0.97 g/t in the first half of 2025. This decline in yield contributed to a 6% decrease in gold production, totaling 232,900 ounces in the first half of 2025 compared with 247,700 ounces in the first half of 2024. Gold Fields achieved a 24% increase in total gold production year over year, reaching 1,136,000 ounces for the first half of 2025. This growth was primarily driven by the successful ramp-up of the Salares Norte mine in Chile, which contributed 123,600 gold-equivalent ounces in the first half of 2025 and is on track to achieve full production capacity in the third quarter of 2025.

The Zacks Rundown for DRD

Shares of DRD have popped 199.9% year to date compared with its industry’s 136% growth.

From a valuation perspective, DRD is currently trading at 20.58X, a premium of about 26% to the industry’s average of 16.31X. It carries a Value Score of F.

The Zacks Consensus Estimate for DRD’s fiscal 2026 earnings is pegged at $1.42, implying a year-over-year decline of 0.7%.

The consensus estimate for fiscal 2026 has been trending lower over the past 60 days.

DRD currently carries a Zacks Rank of #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) here.

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This article originally published on Zacks Investment Research (zacks.com).

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