Pan African Resources Share Discussion Threads

[cinoib] 12/5/2022 18:26

Yes gents I know, have been there before unfortunately. Only last time I was in moderate companies and some never made it. I have also heard the good old crypto has crashed 50% this year. Now there is one I would love to see bite the dust.

[astjgroom] 12/5/2022 17:17

Could be worse. Knew it would happen. Let's see what the market does. Fundamentally we are solid. This time next year Rodney.

[hjs] 12/5/2022 14:24

During world market slowdown and markdown due to "recession", all good and bad companies get marked down regardless what the future holds for that co's. I would say have patience and we will be rewarded. War is not helping either!and Russia wants to be paid in roubles for their oil and gas.

[justiceforthemany] 12/5/2022 12:43

ZAR gold price is up significantly year over year.
P/E 4.5
Low volumes
Even the best companies are being sold

[cinoib] 12/5/2022 11:16

Solar plant up and running, first stage buyback complete and we are still dropping. Yes I know that gold has dropped back, but I think we have over done it a bit in comparison with others in the industry.

[stonedyou] 11/5/2022 16:21

Gold Price Futures (GC) Technical Analysis – Early Reversal Bottom Targets $1870.70 Pivot.


The direction of the June Comex gold futures contract on Wednesday is likely to be determined by trader reaction to $1837.20.


Gold futures are trading slightly better on Wednesday but gains are being capped by a jump in the 10-year U.S. Treasury yield after the release of key inflation data showed a faster-than-expected rise in prices.

April’s consumer price index (CPI), a key measure of inflation, rose 0.3% month over month and 8.3% year over year. Economists expected the CPI to rise 0.2% from the month prior and 8.1% year over year, according to the Dow Jones consensus estimate. That compares with March’s 8.5% year-over-year pace.

Core CPI, which strips out volatile food and energy prices, saw an even bigger month-over-month jump of 0.6%. Economists surveyed by Dow Jones were expecting a 0.4% rise.

At 13:12 GMT, June Comex gold futures are at $1844.50, up $3.50 or +0.19%. On Tuesday, the SPDR Gold Shares ETF (GLD) settled at $171.33, down $1.55 or -0.90%.

Today’s report was a surprise and suggests that the deceleration of this current inflation cycle is going to be painstakingly slow. While high inflation tends to support gold, now that the Fed has started to raise rates aggressively, the precious metals is likely to struggle to gain upside momentum. This suggests the market is still bearish and in a “sell rallies” mode.

[stonedyou] 11/5/2022 16:00

Investment summary

Pan African (PAF) produced a forecast beating 108.1koz gold in H122 (cf 201.8koz in

FY21 and 179.6koz in FY20), to result in an upgrade to its FY22 production guidance

(from 195koz to 200koz) and net senior debt declining by US$36.0m (or 60.1%) to just

US$23.9m over the past 12 months alone.

Industry outlook

In the wake of H122 results, our core valuation of PAF is 33.79c/share

(25.65p/share), based on projects either sanctioned or already in production.

However, this rises by a further 15.07–20.09c (11.44–15.25p) once other assets (eg

Mintails/Mogale, Egoli etc) are also taken into account. Alternatively, if PAF’s

historical average price to normalised EPS ratio of 8.9x is applied to our FY22 and

FY23 forecasts, it implies a share price of 34.83p in FY22, followed by 33.00p in

FY23. In the meantime, it remains cheaper than its London and JSE-listed peers on at

least 69% of commonly used valuation measures and remains among the top 15 yielding

precious metals companies globally.

LAST UPDATED ON 10/05/2022

[stonedyou] 11/5/2022 14:11

Why demand for gold is rising, and expected to continue amid volatility.


More late pandemic risks are resurfacing, sending investors back into defensive mode, according to World Gold Council.


Demand for gold rose significantly in the first quarter this year, rising on the back of strong investment flows in gold ETFs and increased investment in gold bar and coin demand in the U.S. and Europe, and it is expected to keep rising this year, according to the World Gold Council.

“Higher interest rates are likely going to create a happening for gold, especially in an environment where there’s a little uncertainty about what the Fed, and the central banks, are going to do,” Juan Carlos Artigas, the council’s Global Head of Research told Wealth Professional, noting there is concern about how they’ll curb inflation while avoiding a recession. “Higher nominal rates are generally a headwind for gold because they increase the opportunity cost of holding gold.”

He said investors have been surprised by persistent, high inflation, and the war in Ukraine, which have impacted the global economy and commodity prices, but resulted in some gold investment.

“Many exposures were bubbling up before the pandemic. They just took a backseat as the world focused on it. But, now, many of these risks are resurfacing, and I think investors are choosing where they want to put their dollars to ensure they have proper risk mitigating strategies and asset allocation.”

Artigas said the council saw a $50 billion gold ETF in-flow in 2020, but when sentiment started to improve in 2021, there was a $9 billion outflow, “which tells you that there’s a lot more strategic buying for the long-term.” In Q1 2022, there was another $12 billion in-flow.

“What’s interesting from our perspective is it has been consistently increasing for various reasons,” he said, noting many investors use high-quality assets, like gold to diversify, mitigate risk, and provide good long-term returns.

Artigas noted gold’s dual nature – as an investment, but also for jewellery and electronic consumption – allows it to capture some of the upside, when there is positive economic growth, which spurs on jewellery and electronics demand, but also protect the downside by providing a safe haven during periods of risk, and the Q1 results for 2022 show that mix.

During that time, The World Gold Council reported that, gold ETFs jumped by $69 trillion (US) in Q1, recording their strongest quarterly inflows since Q3 2020.

Central banks more than doubled their buying from the previous quarter, adding $84 trillion (US) to global official gold reserves.

Gold bar and coin demand was down 20% from Q1 2021, due to renewed lockdowns in China and historically high local prices in Turkey, though investment was still 11% above its five-year quarterly average.

The technology sector reached its highest level of Q1 demand since 2018 – $82 trillion U.S. – driven by a modest uptick in gold used. But, the jewellery was down seven percent year-over-year, to $474 trillion (US), due to softer demand in China and India.

Meanwhile the gold supply rose four percent year-over-year, lifted by strong mine production and resurgent recycling activity.

The US dollar gold price rose by eight percent. The average quarterly price of US $1,877.2/ounce was approximately five percent higher than in the first quarter of 2021.

Given the current global situation, Artigas recommended that advisors “look at gold as a strategic component in portfolios: not just as a tactical asset when the economic considerations are difficult, but as an effective diversifier as a source of returns.

“It’s a very liquid useful asset that can improve the performance or asset allocation over the long-term. So, our research strongly indicates that gold is an effective, strict strategic investment. It’s a long-term asset.”

[cinoib] 09/5/2022 19:23

Yes well I'm sitting pat untill I see some clarity as to where the world is going.

[astjgroom] 09/5/2022 16:34

Sometimes when the market gets beaten up, people sell gold profits to cover margin calls elsewhere. It's not like the global economic outlook has changed, and real rates are still negative 7%+ just have to be patient, let it test the floor before buyers come back in...

[cinoib] 05/5/2022 14:05

Divmad, from my experience. If you invest solely for dividend then the est bet is to sell the shares 1 day prior to ex dividend then 2 days after buy them back as the price difference will more than cover the divi and the costs of sell and buy. Take a look at a chart for Paf for instance when it was a day to ex and then 2 days later Was about 1.5 p difference and a divi, by the time you got it and after tax was about .65p.

[divmad] 04/5/2022 17:37

What is the expected dividend yield at Paf for a UK investor subject to withholding tax and nothing else?

[johnbull1] 03/5/2022 11:31

Aside the different tax treatment (most retail will pay full 20% SA withholding tax on the dividend), the question of buyback vs dividend depends on valuation. When the stock is on 5x PE, the stock is being bought back at a return of 20% (i.e. trading on the same exact PE, the stock will rise by 0.2 for every £1 bought back). At low valuations buybacks are incredibly powerful. Just as a thought exercise, if PAF reinvested all its earnings into buybacks over the next five years (and assuming earnings don't change) they would be able to buy back every single share outstanding and the share price would rise to infinity (because the final share to be repurchased would have a sole right to £70m earnings). I'm strongly in favour of buybacks until we're at least 10x PE (i.e. 40p+).

[cinoib] 03/5/2022 09:09

Am not a fan of buybacks, a special divi is always appreciated by most holders. I remember Micro foc use to pay out special divis when they had surplus cash. Goes down better with holders in my book.

[lovewinshatelosses] 30/4/2022 10:49

Like all miners in this high inflationary environment, strong cost controls will be essential in the year(s) ahead. Thus far, the management here have given every impression of being highly competent.
I do not think they would have initiated a buy back exercise had they not already factored this in.
In fact, I would imagine sitting on too much cash in times of high inflation would be strategically unwise, albeit a bit of a balancing act. Anyway, time will tell.

[ntv] 29/4/2022 11:40

higher regular dividends

[astjgroom] 29/4/2022 10:08

Is buy back worth it? Generally I like but at 2.3bn shares it will need some spending to reduce. Even 300m share would cost £63m and that's only LSE not including Joburg. Would higher dividends not encourage higher price?suppose I have little sway over it anyway

[astjgroom] 29/4/2022 10:04

Yes but zar has sunk against dollar and costs are in Zar, now 15.88 to dollar vs 14.50 a week ago, so I think that's good news

[cinoib] 27/4/2022 19:08

I see from yesterday announcement that they bought the equivalent of 10 million shares if it was London so looks like to buy back is about done. Going by what they said in the rns a while back.