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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.£195.5m
Last close8.75p
High / Low (52 weeks)15.8p / 6.5p
Stock market listingLN
Forecast net debt (£m)61.5
Forecast gearing ratio (%)28
TeamResources - Mining
SectorMining

Price performance

%1m3m12m
Actual17.620.0(32.7)
Relative *18.720.3(34.7)

* % 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)
2016A 168.4 57.4 45.9 2.08 4.2 3.4
2017A 167.8 32.4 19.4 1.22 7.2 4.6
2018E 152.5 19.0 3.2 0.27 32.4 18.8
2019E 165.9 59.2 38.1 1.55 5.6 3.3

Last updated on 23/07/2018

Latest research

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

Firing on four cylinders

Update | Mining | 16/03/2016

Better than expected

Update | Mining | 25/02/2016

Investment summary

PAF produced 160koz in FY18 cf prior guidance of 157-160koz, with the outperformance exclusively attributable to underground operations at Evander. For the first time, management also provided guidance of 170koz for FY19, which was materially above our prior expectation on account of construction at Elikhulu continuing to progress “ahead of schedule”, such that it is now entering the commissioning phase with first gold expected in August and full production two months later.

Last updated on 27/07/2018

Industry outlook

Elikhulu will add c 52koz pa to PAF's production profile and propel EPS towards c 2p/share. 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 updated all-in valuation of PAF is 17.53p plus the value of c 20.1m underground Witwatersrand ounces, which could add a further 0.17-4.15p/share, depending on market conditions.

Last updated on 27/07/2018

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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