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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.£170.4m
Last close7.63p
High / Low (52 weeks)15.8p / 6.5p
Stock market listingLN
Forecast net debt (£m)65.6
Forecast gearing ratio (%)31
TeamResources - Mining

Price performance

Relative *1.73.2(45.6)

* % 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 3.7 N/A
2017A 167.8 32.4 19.4 1.22 6.3 N/A
2018E 149.4 16.0 0.2 0.03 254.3 N/A
2019E 131.0 50.3 29.5 0.89 8.6 N/A

Last updated on 25/06/2018

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

PAF produced 85koz at a cash cost of US$1,099/oz in H118 to generate headline EPS of 0.20p. Since then it has taken the decision to close the loss-making underground operation at Evander 8 shaft, with the result that H218 production will be c 72koz and FY18 production 158koz (notwithstanding the establishment of two cycling production levels at the high-grade MRC ore body at Fairview).

Last updated on 29/06/2018

Industry outlook

The Elikhulu project is on track to commence production in early FY19, which will add c 52koz pa to PAF's production profile and propel EPS towards c 2.05p/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 updated all-in valuation of PAF is 15.81p (post the disposal of 130m shares by PAR to raise c ZAR126m) plus the value of c 20.1m underground Witwatersrand ounces, which could add a further 0.17-4.15p/sh, depending on market conditions.

Last updated on 29/06/2018

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
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