reports
- Alison Turner
Pan African Resources - Honing FY25e forecasts
Almost exactly half way through its financial year, Pan African has reiterated its production guidance for FY25 of 215,000oz – not least as a result of c 9,000oz gold produced at MTR in H125 following a seamless ramp-up process that has proceeded ahead of schedule since commissioning in early October. As a consequence, we have revised our production expectations for FY25 up by 3,130oz (1.5%), although we have revised our normalised headline EPS (HEPS) expectations down by a modest 4.2% to reflec...
- Alison Turner
Pan African Resources - Tennant Creek acquisition
On 5 November, Pan African Resources (PAF) announced that it is to acquire privately owned Tennant Consolidated Mining Group (TCMG) in Australia’s Northern Territory for a total consideration of US$54.2m in an all-share deal that involves it issuing an additional 125.4m shares (or 6.5% of its existing share capital). The acquisition price equates to an undemanding US$42.15 per resource ounce of gold or US$139.21 per reserve ounce. While we expect the acquisition to have little effect on PAF’s ea...
- Alison Turner
Pan African Resources - Analysing H224 and looking forward to FY25
Pan African Resources’ (PAF’s) FY24 results, announced on 11 September, were within 1% of our prior forecasts for both EPS (4.14c cf 4.17c) and headline EPS (HEPS; 4.15c cf 4.17c). However, if the contract liability related to its ZAR400m financing facility for Mintails is stripped out, we calculate that PAF would have recorded HEPS of 5.27c, which would have been close to the top of the range of analysts’ expectations and also a record for both 12-month and six-month periods. While arguably aca...
- Alison Turner
Pan African Resources - Hitting expectations
On 29 July, Pan African Resources (PAF) announced it had produced 186,039oz gold in FY24 at an all-in sustaining cost (AISC) of US$1,350/oz. This was within the previously guided range of 186–190koz at an AISC of US$1,325–1,350/oz and was 212oz (0.1%) above our expectation of 185,827oz. Production guidance for FY25 was reiterated at 215–225koz (cf Edison’s unchanged and relatively conservative forecast of 216.6koz). Our financial forecasts for FY24 remain little changed as a result of PAF’s anno...
- Alison Turner
Pan African Resources - An accounting storm in a legal teacup
This morning, Pan African announced that it may have been in technical breach of the net asset test when it paid out dividends to shareholders in the five years from FY19–23 and also when it instigated its share buyback programme in 2022. As attested to by the fact that it took five years to be noticed, the apparent breach arises from the nexus of an arcane bit of legislation and a curious distinction between the presentation currency of the group (the US dollar) and its functional currency (the...
- Alison Turner
Pan African Resources - Upgraded FY24 production guidance
On 9 May, Pan African announced that it was narrowing its production guidance for the year ending 30 June 2024 to 186–190koz (cf 180–190koz previously), notwithstanding the cessation of production from surface sources at Evander in H2. Group AISC guidance was maintained at US$1,325–1,350/oz (at ZAR18.50/US$) however. Consequently, we have increased our H2 production forecast by 2.5% as well as increasing our H224 gold price by 9.2% to result in a US$20.6m positive variance in H224e revenue, only...
Pan African Resources: 2 directors
Two Directors at Pan African Resources bought 1,439,998 shares at between 5.620ZAR and 5.650ZAR. The significance rating of the trade was 53/100. 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 ...
- 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...
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