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Pan African Resources (PAF)

Business description

Pan African Resources has four major producing or near-producing precious metals assets in South Africa: Barberton (targeting 95koz Au pa), Barberton Tailings Retreatment Project (20koz), Evander Tailings Retreatment Project (10koz) and Elikhulu (55koz).

Stock data

Market cap.£234.6m
Last close10.50p
High / Low (52 weeks)10.8p / 6.5p
Stock market listingLN
Forecast net debt (£m)88.8
Forecast gearing ratio (%)70
TeamResources - Mining

Price performance

Relative *11.518.829.2

* % Relative to local index

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Company news

Y/E Jun Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2017A 167.8 32.4 19.4 1.22 8.6 5.5
2018A 154.2 14.8 2.4 1.60 6.6 N/A
2019E 160.1 54.5 31.8 1.09 9.6 4.3
2020E 187.1 79.2 58.2 1.83 5.7 2.7

Last updated on 30/01/2019

Latest research

On track for 170koz in FY19

Update | Mining | 12/11/2018

Return to dividend paying status in FY19 a priority

Update | Mining | 11/10/2018

EGM's Parthian shot

Update | Mining | 19/07/2018

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

Investment summary

With 1.08p of EPS derived from continuing operations and 160.4koz of production, PAF's FY18 results were ahead of our expectations. The closure of Evander underground will cost PAF c 49koz pa in lost production. However, it will be more than made up for by Elikhulu, which is now operating at full capacity and will propel EPS towards c 2p/share. In the meantime, interim production of 81koz puts PAF well on course to meet its production guidance of 170koz for FY19.

Last updated on 01/02/2019

Industry outlook

Additional near-term opportunities include the the Fairview sub-vertical shaft project (adding 7-10koz to production pa), the Royal Sheba project (c 30koz pa) and Egoli (optimised 34% IRR and ZAR1.04bn pre-tax NPV). Our all-in valuation of PAF is currently 17.01p/share plus the value of c 20.1m underground Witwatersrand ounces (which could add a further 0.17–4.15p/share). In addition, it remains cheaper than its peers on at least 91% of common valuation measures and has the eighth-highest prospective dividend yield globally.

Last updated on 01/02/2019

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
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