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.£177m
Last close7.92p
High / Low (52 weeks)17.2p / 7.9p
Stock market listingLN
Forecast net debt (£m)31
Forecast gearing ratio (%)13
TeamResources - Mining
SectorMining

Price performance

%1m3m12m
Actual(40.5)(47.2)(52)
Relative *(37)(46.1)(52.3)

* % Relative to local index

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Company news

Pan African Resources still in profit and paying dividend, despite tough few ...

Tue, 13 Feb 2018 08:02:36 GMT

Pan African Resources is reviewing its cost base and "strategic merits" of its ...

Thu, 01 Feb 2018 10:43:41 GMT

Pan African Resources on recovery track

Fri, 20 Oct 2017 10:39:54 GMT

Pan African Resources restructures black economic empowerment arrangements

Fri, 15 Dec 2017 11:29:53 GMT

Pan African no longer picking over the bones of ASA Resource Group

Wed, 07 Feb 2018 15:26:34 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 3.8 3.0
2017A 167.8 32.4 19.4 1.22 6.5 4.1
2018E 196.7 62.0 51.4 1.91 4.1 2.3
2019E 207.9 68.2 46.8 1.72 4.6 2.1

Last updated on 19/01/2018

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

During CY17, PAF announced the disposal of Uitkomst and Phoenix for an aggregate ZAR364m (£22m, or US$28m) and 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 the project, which we value at US$69.9m at a 10% discount rate, has already been granted. Recently, PAF also successfully reorganised its BEE structure to ensure continuing compliance with the legislative environment.

Last updated on 02/02/2018

Industry outlook

Wage negotiations at Barberton have been concluded and production of gold 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 to c 3p/sh (Edison estimate). Applying a 10% discount rate to future dividends, we value PAF at 21.69p/sh. In the meantime, it is cheap relative to history and its peers. It also has one of the highest forecast dividend yields globally.

Last updated on 02/02/2018

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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