Goldfields announced at the end of August that they are going to retrench another 1 560 people at their South Deep mine. South Deep employs 3 614 full-time employees and 1 940 contractors. South Deep is their only SA mine left, they bought this mine in 2006 and ever since then the mine hasn’t been profitable and has eaten R32 billion so far. Their latest financial results for the six months ending in June 2018 reported a strong financial position, with the integrity of the balance sheet remaining intact after funding cumulative project expenditure (Damang and Gruyere) of US$330m over the past 18 months.

  • The consolidation that we wrote about changed into an inverse head and shoulder formation (positive).
  • The inverse head and shoulder formation (positive) was confirmed when the neckline waiting at line A (R36-63) changed into a support. The conservative target of the formation is R39-10 and the full target of the formation is R40-36 should the full formation play out.
  • The MACD is still showing optimism.
  • The 3 & 8 day moving averages have also crossed upwards which confirms the optimism.
  • A window is waiting between R48 and R48-10.
  • For traders – Buy or consider a long above line A (R36-63) but use R34-50 as stop loss to protect capital. The possible targets towards the bottom are R37-51, R38-05, R38-49, R38-93, R39-55 and R40-35.
  • For medium to long term investors – A possible double bottom was confirmed on a weekly graph which is seen as positive. The share is nicely oversold on the weekly graph which makes the probability of a bounce more likely. The share will only warn again below R34-80.

Dont hesitate to ask if anything is unclear.

Frans & Christelle