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.£153.3m
Last close6.86p
High / Low (52 weeks)16.8p / 6.7p
Stock market listingLN
Forecast net debt (£m)73.1
Forecast gearing ratio (%)35
TeamResources - Mining

Price performance

Relative *(8.9)(29.9)(60.4)

* % Relative to local index

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Company news

Pan African on track to produce between 177000 and 181000 ounces of gold this year

Mon, 16 Apr 2018 13:30:00 GMT

Pan African Resources to cease underground operations at the Evander gold mine ...

Wed, 02 May 2018 14:46:35 GMT

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 restructures black economic empowerment arrangements

Fri, 15 Dec 2017 11:29:53 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 3.3 2.6
2017A 167.8 32.4 19.4 1.22 5.6 3.6
2018E 149.4 16.0 0.2 0.03 228.7 21.3
2019E 131.0 50.3 28.8 0.92 7.5 3.1

Last updated on 16/05/2018

Latest research

Finishing unfinished business

Update | Mining | 16/05/2018

A second glance at the first half

Update | Mining | 23/04/2018

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

Investment summary

On 2 May Pan African (PAF) announced that, after both internal and external reviews had concluded there was “no realistic prospect of mining [Evander 8 Shaft underground] on a sustainable and profitable basis”, the decision had been taken to shut the operation by the end of May, with the loss of 1,700 jobs and at a cost of c ZAR160m (US$13.1m, or £9.5m). As a result, Evander’s (EGM’s) gold production for FY18 is now expected to be c 46koz vs a prior expectation of 67-69koz, while group production is expected to be 156-158koz vs a prior expectation of 177-181koz.

Last updated on 16/05/2018

Industry outlook

The Elikhulu project is on track to commence production in early FY19, which will add c 52koz to PAF's production profile and propel EPS towards c 3p/sh. Additional near-term opportunities include the Egoli project (46% IRR and ZAR1.74bn NPV), the Fairview sub-vertical shaft project (adding 7-10koz to production pa) and the Royal Sheba project (c 30koz pa). Our all-in valuation of PAF is 19.59p/sh, of which Evander underground (where it is in section 189 talks with labour) accounts for just 2.54p.

Last updated on 27/04/2018

Key management

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

Company address

Suite 31, 2nd Floor, 107 Cheapside
United Kingdom
+ 44 (20) 7499 3916
View website