The gold price ran up during December and it’s perhaps timely to reconsider some of the smaller producers operating at higher cost structures because their profitability is the most highly leveraged to a rising gold price.
So I thought I'd take a look at how DRM is doing. The outlook is better than it has been for some time. Along with the improved gold price macro picture, there are some company specific factors going in its favour.
Production at its Deflector mine is increasing, grades are higher and new ore bearing structures are being delineated. This mine is also throwing off significant copper credits, with 25% of revenue coming from the base metal, creating some commodity diversity.
Turning to the weekly chart, this suggests that the SP may have ended a long down trend and started moved sideways in a possible reversal zone after bottoming out at 16c
Today's SP hit a high of 26.5c and it now looks like the former support level at 27c is about to be tested. A move through this level could confirm the start of an upswing for this stock.
