Pan African Resources (PAF)

Business description

Pan African Resources has five major precious metals assets in South Africa: Barberton (target output 95koz Au pa), the Barberton Tailings Retreatment Project (20koz), Evander (95koz), the Evander Tailings Retreatment Project (10koz) and Elikhulu (53koz).

Stock data

Market cap.£324m
Last close14.50p
High / Low (52 weeks)20.0p / 12.5p
Stock market listingLN
Forecast net debt (£m)31
Forecast gearing ratio (%)13
TeamResources - Mining
SectorMining

Price performance

%1m3m12m
Actual7.41.8(22.7)
Relative *9.42.2(30)

* % Relative to local index

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Company news

Pan African Resources predicts recovery in current year after challenges at ...

Wed, 20 Sep 2017 07:23:48 GMT

Pan African higher after concluding Barberton Mines wage agreement

Wed, 18 Oct 2017 08:30:55 GMT

Pan African Resources to pay out a record £17mln to investors as first-half ...

Wed, 22 Feb 2017 09:35:09 GMT

Pan African Resources to sell Phoenix Platinum to Sylvania Resources for ...

Mon, 31 Jul 2017 06:56:31 GMT

Proactive weekly mining news - Pan African Resources, Tharisa, Vast Resources ...

Sat, 23 Sep 2017 07:30:00 GMT

Y/E Jun Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2016A 168.4 57.4 45.9 2.08 7.0 5.6
2017A 167.8 32.4 19.4 1.22 11.9 7.6
2018E 196.7 62.0 51.4 1.91 7.6 4.2
2019E 207.9 68.2 46.8 1.72 8.4 3.9

Last updated on 18/10/2017

Latest research

FY17 results in line

Update | Mining | 28/09/2017

Disposals hone investment case

Update | Mining | 24/08/2017

Canning coal

Update | Mining | 17/05/2017

Tails wagging

Update | Mining | 04/04/2017

The big one pounds ahead

Update | Mining | 13/12/2016

New dividend policy unveiled

Update | Mining | 28/09/2016

BEEing good

Update | Mining | 18/08/2016

Firing on four cylinders

Update | Mining | 16/03/2016

Better than expected

Update | Mining | 25/02/2016

Four cylinders firing at once

Update | Mining | 11/02/2016

Evander trending higher

Update | Mining | 10/12/2015

Uitkomst coal acquisition

Update | Mining | 15/06/2015

Investment summary

So far in CY17, PAF has announced the disposal of Uitkomst and Phoenix for an aggregate ZAR364m (£21.5m, or US$27.7m) as well as a placing to raise ZAR705m (£41m, or US$51m). Together, these initiatives effectively finance the ZAR1.7bn Elikhulu project to add c 52koz (or 25%) to PAF’s production profile by FY20. Final regulatory approval for project construction has been granted and we value it at US$69.9m at a 10% discount rate.

Last updated on 02/11/2017

Industry outlook

Profit after tax of £17.9m in FY17 was closely in line with our expectations after a materially lower tax charge. Wage negotiations at Barberton have been concluded and production of gold in FY18 is now expected to increase to >190koz in FY18 and c 250koz in FY20 (cf 173koz in FY17), which will drive a significant increase in future EPS. Applying a 10% discount rate to future dividends, we value PAF at 21.69p/share. In the meantime, it is cheap relative to history and its peers as well as having one of the highest forecast dividend yields globally.

Last updated on 02/11/2017

Key management

Keith Cousens Spencer, Chairman
Cobus Loots, CEO
Deon Louw, FD

Company address

Suite 31, 2nd Floor, 107 Cheapside
London
EC2V 6DN
United Kingdom
+ 44 (20) 7499 3916
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