reports
- Alison Turner
Pan African Resources - A happy valentine
Pan African Resources’ (PAF’s) H124 results were released on 14 February, with earnings (and headline earnings) within 1.5% of our forecast and normalised headline earnings within 1.2% of our forecast (see Exhibit 4). While only one asset (BTRP) achieved record adjusted EBITDA, PAF’s three other main assets all recorded adjusted EBITDA numbers that were close to record levels in rand terms to result in a record adjusted EBITDA outcome for the group as a whole of ZAR1,512.6m – 20.2% above H222 an...
- Alison Turner
Pan African Resources - Anticipating a happy valentine
Pan African Resources’ (PAF’s) production update of 22 January revealed H124 production of 98,458oz gold, compared with prior guidance of 94,000–98,000oz, Edison’s expectation of 96,000oz and a figure of 92,307oz in H123. For the moment, we have left our financial forecasts for H124 unchanged, seeing roughly equally balanced upside and downside risks to our estimates pending actual results on 14 February. However, we note that the gold price is currently trading almost US$200/oz above our assume...
- Alison Turner
Pan African Resources - Valuation up 22.2% with new gold price forecas...
On 22 November, Pan African Resources (PAF) announced that operations to date in FY24 had performed in line with, or better than, expected, with gold production for H124 anticipated to be in the range 94,000–98,000oz (cf 92,307oz in H123). As a result, it increased its production guidance for FY24 to 180,000–190,000oz, which caused us to increase our production estimate in turn by 1.9% (or 3,575oz) to 189,725oz. The change made only a modest difference to our EPS forecasts for FY24 (see Exhibit ...
- Alison Turner
Pan African Resources - Advancing to 250koz in annual output in FY26
Pan African Resources’ (PAF’s) FY23 results, announced on 13 September, were closely in line with our forecasts. Barberton underground, Evander underground and the Barberton Tailings Retreatment Project (BTRP) all recorded higher throughputs at slightly lower grades than we had been expecting, but also lower unit cash costs in ZAR/t terms. Elikhulu performed in line with our expectations in terms of output, albeit at slightly higher unit costs, owing to continued electricity supply disruptions a...
- Alison Turner
Pan African Resources - Dividend yield trending higher than P/E ratio
On 7 August, Pan African Resources (PAF) announced FY23 production of 175,209oz, which was within 0.1% of its guidance of 175,000oz on 26 May. It also indicated all-in sustaining costs (AISC) of US$1,325–1,350/oz (at ZAR17.77/US$), reiterated output guidance of 178–190koz for FY24 and reported net senior debt of US$18.9m as at end-June (cf US$49.9m as at end-H123). In response to the announcement, we have reduced our FY23 normalised HEPS forecast for PAF by 8.3%, from 3.82c/share to 3.50c/share ...
- Alison Turner
Pan African Resources - Taking the rough with the smooth
In its operational update, released last week, Pan African Resources (PAF) reduced its production guidance for FY23 by c 12.5% from 195–205koz to 175koz. The reduction was due to instability and disruptions in the electricity supply to PAF’s operations (c 10koz), a slower ramp up to continuous operations at Barberton and faulting at the Kimberley reef at Evander, coupled with a delay in transitioning to full production at 24 Level. In addition, we anticipate that PAF will record a small loss of ...
- Alison Turner
Pan African Resources - Innovative funding avoids dilution
On 13 March, Pan African Resources (PAF) announced the completion of the final component in its funding package for its Mintails dump retreatment project outside Johannesburg. The funding is in the form of an innovative transaction with Rand Merchant Bank (RMB) in the style of a synthetic forward sale agreement, whereby Pan African will sell 4,846oz of gold per month to RMB for 24 months, commencing in March at a fixed price of ZAR1,025,000/kg (US$1,750/oz at the prevailing forex rate), in retur...
- Alison Turner
Pan African Resources - Forecast upgrade
Pan African Resources (PAF) announced its FY23 interim results in the context of known production results and a JSE listing requirement paragraph 3(b) trading statement that indicated both earnings per share and headline earnings per share (HEPS) in the range 1.40–1.64c at the interim stage. In the event, HEPS and EPS for the six-month period were exactly in the middle of the guided range at 1.52c/share. In the wake of the H123 results, we have upgraded our forecast for normalised HEPS for FY23 ...
Hybridan Small Cap Feast - 15 Feb 23
15 February 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objec...
- Alison Turner
Pan African Resources - Setting the scene for FY23 and beyond
Based on adjusted EBITDA, Pan African Resource’s performance in H222 was its third best on record and only fractionally (3.8% or ZAR47.8m) below its record level of ZAR1,264.8m in H122. Despite normalised headline earnings per share (HEPS) being slightly below our prior expectations, this could be attributed to operating costs that stuck at higher levels than we had previously anticipated (in common with much of the global mining industry), which were left unrelieved by only a modest depreciatio...
Thanks to a better fundamental star rating, PAN AFRICAN RESOURCES sees...
The independent financial analyst theScreener just awarded an improved star rating to PAN AFRICAN RESOURCES (GB), active in the Gold Mining industry. As regards its fundamental valuation, the title receives an improved star rating and now shows 3 out of 4 possible stars. With regard to its market behaviour, it remains unchanged and can be qualified as risky. theScreener considers that these elements allow slightly upgrading its rating to Neutral. As of the analysis date January 4, 2022, the clos...
Pan African Resources (PAF): Everything falling into place
Edison Investment Research Limited Pan African Resources (PAF): Everything falling into place 29-Oct-2021 / 07:00 GMT/BST London, UK, 29 October 2021 Pan African Resources (PAF): Everything falling into place Pan African's FY21 results were closely in line with our expectations. Mining profit for the full 12-month period was US$128.0m (cf our estimate of US$132.7m - see Exhibit 2), profit after tax US$74.7m (cf our estimate of US$75.1m) and EPS 3.87c per share (cf our estimate of 3.90c). Most striking, however, was the 28.5% increase in the proposed final dividend to ZAR402....
- Alison Turner
Pan African Resources - Everything falling into place
Pan African’s FY21 results were closely in line with our expectations. Mining profit for the full 12-month period was US$128.0m (cf our estimate of US$132.7m – see Exhibit 2), profit after tax US$74.7m (cf our estimate of US$75.1m) and EPS 3.87c per share (cf our estimate of 3.90c). Most striking, however, was the 28.5% increase in the proposed final dividend to ZAR402.2m, or 1.26671cps at the prevailing forex rate. This was above the company’s dividend policy guidelines, but reflected managemen...
- Alison Turner
Pan African Resources - Everything falling into place
Pan African’s FY21 results were closely in line with our expectations. Mining profit for the full 12-month period was US$128.0m (cf our estimate of US$132.7m – see Exhibit 2), profit after tax US$74.7m (cf our estimate of US$75.1m) and EPS 3.87c per share (cf our estimate of 3.90c). Most striking, however, was the 28.5% increase in the proposed final dividend to ZAR402.2m, or 1.26671cps at the prevailing forex rate. This was above the company’s dividend policy guidelines, but reflected managemen...
- Alison Turner
Pan African Resources - Exceeding expectations (as usual)
Pan African (PAF) announced its operational results for the year ended 30 June 2021 on 13 July, with output for the full year 6,609oz (3.4%) higher than PAF’s own guidance of 195,000oz from as recently as May 2021 and 7,383oz (3.8%) above Edison’s forecast. All of the substantive outperformance could be attributed to operations at Evander underground, which more than made up for an early shortfall in production in H121. Otherwise, group net senior debt was reported to be very close to Edison’s p...
Pan African Resources: 1 director bought
A director at Pan African Resources bought 1,278,950 shares at 3.166ZAR and the significance rating of the trade was 57/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two yea...
- Alison Turner
Pan African Resources - Record interim profitability
Pan African Resources’ (PAF) interim results to end-December 2020 were reported in the context of already known production and were well within the range indicated by its JSE paragraph 3.4(b) announcement of 8 February. EPS and HEPS almost doubled in the period to 2.11c/share, albeit this included an (effectively) exceptional loss from the last of PAF’s hedge programme, which if excluded would have increased EPS and HEPS to (we estimate) 2.46c/share (see Exhibit 2). Moreover, this result was ach...
- Alison Turner
Pan African Resources - Entailed
Pan African Resources (PAF) has announced that it is to acquire 100% of Mogale Gold and Mintails SA Soweto Cluster from Mintails’ liquidator for ZAR50.0m (US$3.2m). Combined, the two assets host a mineral resource of 243Mt (in tailings), containing 2.36Moz gold. As such, consideration equates to US$1.31 per oz of contained gold cf an average valuation of US$9.88/oz for London-listed pre-production gold assets (see Gold stars and black holes, published in January 2019). Closure of the deal is sub...
- Alison Turner
Pan African Resources - The sun rises over Egoli’s city of gold
Notwithstanding COVID-19, Pan African’s (PAF) normalised financial results for FY20 were materially ahead of our expectations, driven by a US$9.9m positive variance in the direct cost of production (see Exhibit 3). In consequence, the group announced a more than fivefold increase in its proposed dividend for the year in US dollar terms to a record ZAR312.9m, putting it among the top 14 dividend-paying precious metals companies globally in terms of yield (see Exhibit 15). While FY20 represented a...
- 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 U...
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