Edison Investment Research - Pan African Resources PLC (PAF) Pan African Resources - Back to where it belongs

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Edison Investment Research

Alison Turner

Pan African Resources - Back to where it belongs

On 10 July, Pan African Resources (PAF) released an operational update for the year to end June 2020 detailing production of 179,575oz gold in the year to June 2020. While production in H220 was (inevitably) lower than in H120 (see Exhibit 1) owing to the coronavirus, full-year production was nevertheless 4.1% higher than in FY19, 2.0% higher than guidance and 2.1% higher than our forecast (see Exhibit 2). In addition, PAF announced that net debt had declined from US$123.7m in December 2019 to US$62.5m in June 2020 (cf May guidance of US$70.0m â€“ company calculation) â€“ a reduction of US$61.2m or 49.5% within the space of six months. Self-evidently, continued debt reductions at this rate could see PAF net debt free within the next 12 months. This note updates our earnings forecasts and also our valuation for now known production in FY20, as well as changes in the macro-environment and the increase to our long-term estimated gold price (see A golden future, published on 11 June 2020).

28/07/2020 18 EN

Underlying

Pan African Resources PLC

Pan African Resources is a mid-tier African-focused precious metals producer. Co.'s business activities were conducted through the following business segments: Barberton Mines (including Barberton Tailings Retreatment Plant), located in Barberton, South Africa; Evander Mines (including Evander Mines' Tailings Retreatment Plant), located in Evander, South Africa;Corporate; and Pan African Resources Funding Company Proprietary Limited.

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GB0004300496 London Stock Exchange United Kingdom

Provider

Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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Analysts

Alison Turner

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Pan African Resources - Back to where it belongs

Pan African Resources: 2 directors

Pan African Resources - A happy valentine

Pan African Resources - Anticipating a happy valentine

Basilea Pharmaceutica - Cresemba milestone payments continue to roll in

AAC Clyde Space - Solid start to the year with further order growth

Tinexta - Typical seasonality in Q124

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