Pan African Resources Share Discussion Threads

[jjhbev] 04/8/2016 09:17

A “little” something that is almost lost in the update is the following wording on the Cost Collar:-

“During the current reporting period, the Group recorded a post-tax unrealised mark-to-market fair value loss of ZAR82million on the Cost Collar (2015: post-tax realised Cost Collar derivative income of ZAR32.3 million). The economic consequence of the mark-to-market fair value adjustment is to lock in revenue on 25,000oz of gold production from Barberton Mines at ZAR625,000/kg (the closing ZAR gold price at 30 June 2016) for the twelve month period commencing 1 October 2016.”

So, PAF has taken an after tax hit of almost £4.5m in this year’s figures – which equates to just over 0.22p per share. Guidance for “Normalised221; HEPS is 2p to 2.13p. Without this charge it would have been 2.22p to 2.35p.

For next year’s figures 25k oz of sales are now effectively hedged at ZAR 625k per kilo or approx $1265 per ounce.

[srpactive] 03/8/2016 21:42

Very good and informative post, thank you.
Paf really is a stock that could appreciate greatly in the
next twelve months.

regards

active

[dangersimpson2] 03/8/2016 17:27

Just done some quick maths of changes 16H2 to 17H1 for a post elsewhere so thought I'd share on here

- Higher rand gold price today of ZAR609k/kg vs 543k/kg H2 Average = +12.2% EPS

- FX is better today at 18.62 vs H2 Average of 21.45 = +15.2% sterling EPS

- lower number of shares in issue (I got the outcome of the Shanduka transaction wrong originally and modelled an increase in shares.) = +21.5% EPS

- Barberton cost collar expiring Oct 2016 25koz = 777kg @ spot ZAR vs ZAR440k/kg = +ZAR131m = +£7m = +0.5p total EPS cost over lifetime of collar.

So at today's gold price & FX we are likely to see a 57% growth in whatever EPS measure you prefer from 16H2 to 17H1 plus whatever positive contribution from uitkomst colliery & IFM returning to normal give. Then 17H1 to 17H2 could have a further positive boost of up to 0.5p EPS from Barberton Collar expiring.

Broker consensus is only for +54% EPS growth for 2017 so there is scope for these to be increased during the year if gold prices and fx stay at current levels.

[srpactive] 03/8/2016 14:23

Trying to shake out weak holders before the news feeds through.

MM's trying mask with move down, bid up to 23p, they want your stock,
news feeding through, the IC will be very positive indeed on paf as they
do like the stock and talk of 50% increase in paf gold production and a booming
gold price who can blame them. Forward 2017 pe of 5.

dyor

regards

active

[coincall] 03/8/2016 14:07

More good news to come later this year!



[...]

Very good year for gold, says Pan African Resources plc CEO
10:23 03 Aug 2016

Pan African Resources plc (LON:PAF) chief executive Cobus Loots says he is looking forward to the results from a definitive feasibility study that is currently underway. If successful, it could add 50% to the current production rate.
“It was a very good year for Pan African, certainly from a gold perspective, production increased at both the Barberton operation which is our flagship for the group and Evander,” says Loots.
The Evander operation was struggling last year but is now up 31%.
He says the improvement is due in part to the increase in the price of gold which rose by 21.6% in rand terms over the year.
“The Shanduka Gold transaction was also fantastic for our shareholders,” says Loots, referring to the black economic empowerment partnership deal earlier this year.
“If we had done this transaction at start of the financial year that would have meant a 17% increase in earnings for share so I think that’s very attractive,” he adds.

[srpactive] 03/8/2016 11:02

And the buying continues, paying full ask 23p, now offer has risen to
23.25p. This will be one of the last chances of buying in the 20's once
yesterday's rns becomes common knowledge.

Edit: full ask 23.25p being paid, looking very strong today, gold rising a little.

dyor

regards

active

[scottishfield] 03/8/2016 10:12

Peel Hunt upgrades today fm 17p to 26p I believe.

[srpactive] 03/8/2016 08:48

Yes, formation looking very powerful now, if 23.75p
breaks to the upside it will move quickly sharply higher.

Bid and offer rising, full ask at 23p being paid now. Gold rising.

dyor

[gymratt] 02/8/2016 22:15

...and a pennant flag about to bust to the upside , IMO..

[pixi] 02/8/2016 17:27

Excellent trading update and reduction in debt.

[gymratt] 02/8/2016 17:06

Thanks, coincall. It's all good. Just need gold to carry on past $1900 now...;-)

[gymratt] 02/8/2016 16:53

If you look at HGM, a similar thing happened there..it was 'range bound' in the early 90's for a few weeks and then 'BOOM'..up by over 50% in short order. I think this will 'pan out'(!) the same.. ;@)

[gymratt] 02/8/2016 16:41

'mates rates' for the big boys, then the brakes come off! ;@)

[coincall] 02/8/2016 16:20

chart above showing 3m shares traded but main trades list actually just about to break 5m

[srpactive] 02/8/2016 15:47

Come back at 16.35, I reckon 24.25p.

dyor

[tom111] 02/8/2016 15:46

Yes $1366, cant u sort the share price out srpactive give it a push, bit disappointing

[srpactive] 02/8/2016 15:41

IMPORTANT NEWS:

Gold breaks into new twelve month high.

dyor

Another 155000 buy it would appear.

[srpactive] 02/8/2016 15:33

I would not want to be short gold miners after 4.30 uk, especially
if $1365.4 is closed above tonight at 10pm.

dyor

[srpactive] 02/8/2016 13:44

Gold getting near 12 month high of 1365, once through, it will
zoom.

edit: tickling the high now, the mm's playing a good game, mark
it up higher at the close. Ready for the papers and magazine articles
reporting on trading statement released today.

edit 2: mm's trying to shake out holders now before news gets printed
tomorrow. Gold nearly breaking out, $1364.3, needs to get above £1365.4.

edit 3: No wonder the mm's are shaking out, someone has just bought
150000, the buyers are coming.

dyor

[srpactive] 02/8/2016 12:08

Should be alot higher now, this is being held back.

Forward eps 4p, gives an approximate pe of 5, this could
double of even treble and it would still be good value.

And if gold gets to $1500 or higher, you could see 100p.

Still buying at this figure.

dyor

regards

active

[srpactive] 02/8/2016 11:47

Pan African Earnings Soar After Gold Units Benefit From Higher Prices
Pan African Resources PLC Tuesday said earnings in the recently ended financial year are expected to be substantially higher following robust...

[coincall] 02/8/2016 11:05

Thank you dangersimpson2, that would be very useful.

Interesting to see huge change in net debt AFTER share buy-back and aquisition...

GROUP NET DEBT

The Group's operations are robust in their cash generation and its net debt
position at 30 June 2016 was ZAR347 million (2015: ZAR321 million), after the
cash share buy-back of ZAR182 million for SBSA's interest in Shanduka Gold, the
acquisition of the Uitkomst Colliery for ZAR148 million in cash and the ZAR210
million dividend payment in December 2015.

At the date of this trading statement, the Group's net debt had reduced to
ZAR255 million, which included an amortising ZAR82 million gold loan entered
into in 2014 to finance the Evander tailings retreatment plant.

[dangersimpson2] 02/8/2016 11:01

Nice trading statement.

My estimate of 2.08p was right in the middle of their HEPS range. However my estimate was based on today's gold price and H1 production volume. The average gold price and FX were less favourable than the ending values.

What I got wrong in my previous understanding was the impact of the Shanduka transaction. It seems that this is being done at the corporate level not the operating company level so that the net impact of this is actually a reduction in the number of shares to 1.15b not an increase to 1.94b as I had modelled.

With the following positive developments in FY17:

- Higher rand gold price
- better FX into GBP
- lower number of shares in issue
- Barberton cost collar expiring Oct 2016
- Full year uitkomst colliery contribution to earnings
- resolution of IFM issues.

Will try to update model later but we could easily be on for 4p+ EPS FY17.