Pan African Resources Share Discussion Threads

[stonedyou] 30/8/2022 15:16

Upside and optionality

As far as investors are concerned, Mogale is potentially another Elikhulu for Pan

African. As such, PAF is in a position to acquire for US$2.55/oz (for Mogale alone)

an asset that should be worth US$9.88/oz in-situ, could be worth US$53.11/oz (pre-

development) and may be worth up to US$94.09/oz, post-initial capex and debt

repayment. Additional valuation optionality (potentially of the same order of

magnitude – ie 2.26c/share) is then provided by the other half of the resource to be

acquired (MSC) for which there is currently no immediate development plan.

[stonedyou] 30/8/2022 15:16

Adding value and enhancing EPS

At Edison’s long-term gold prices and prevailing forex rates, we estimate that Mogale

has the potential to add an immediate 2.26c to our valuation of Pan African (post-tax

and net of acquisition costs) and to enhance its earnings per share by an average

1.76 US cents per share in FY25–29 and by an average 0.45 US cents per share in FY30–

34.

[stonedyou] 30/8/2022 15:15

On 30 June 2022, Pan African announced that it had successfully completed a definitive feasibility study (DFS) on the Mogale assets that it is in the process of acquiring. Highlights from the DFS were that the project has the potential to increase the group’s gold production by c 50koz pa (or c 25% of current group production) over a 13-year life at a capital cost of ZAR2.5bn (US$157.8m) and an all-in sustaining cost US$914/oz, to result in a pre-tax project NPV9.5 of ZAR1,006m (US$64.9m, or 3.3c or 2.8p per share) and a real internal rate of return of 20.1% at a gold price of US$1,750/oz and a forex rate of ZAR15.50/US$. We have now incorporated the results of the DFS into our model, as well as updating our forecasts to reflect recent moves in the gold price and forex rates (only).

[stonedyou] 30/8/2022 15:13

Pan African Resources has four major producing precious metals assets in South

Africa: Barberton (target output 95koz Au pa), the Barberton Tailings Retreatment

Project, or BTRP (20koz), Elikhulu (55koz) and Evander underground, incorporating

Egoli (currently 36koz, rising to >100koz).

[lovewinshatelosses] 30/8/2022 13:29

It must be an ii selling down. Thought it would have recovered a bit by now. Certainly selling off more than the others at this stage. Hmmm.

[stonedyou] 30/8/2022 12:36

Catalyst for $3,000/Ounce Gold Price: Central Banks Buying Gold.


Central Banks’ Gold-Buying Doubled in 2nd Quarter of 2022

If you’re an avid gold market follower, it’s important to pay attention to what central banks do. Recently, they’ve been loading up on the yellow precious metal, which could take gold prices much higher. As long as central banks remain in the gold market, don’t rule out the possibility of $3,000/ounce gold.

You know what’s comical? You’ll hear all sorts of stories in the mainstream media about what central banks could do. You’ll hear analysts tell us why interest rates should go higher—or why they shouldn’t. Or how much money central banks should print. And a lot more stories like that.

On the other hand, you’ll rarely hear from the mainstream media about central banks loading up on gold. It’s astonishing what central banks have been doing lately. In fact, three of the most certain things about central banks are: they like gold, they are buying gold, and they will continue to buy gold.

Why do central banks want to buy gold? There’s a very simple reason: gold is one of those assets that, over the long term, doesn’t really have a high correlation with other assets. Therefore, it keeps bank reserves anchored.

In the second quarter of 2022, central banks purchased 180 tonnes of gold. Compared to the first quarter of 2022, their gold buying doubled! (Source: “Gold Demand Trends Q2 2022,” World Gold Council, July 28, 2022.)

In the first half of 2022, central banks’ gold purchases amounted to 270 tonnes. Over the past five years, the average gold purchases by central banks in the first half of the year amounted to 266 tonnes. This year, their gold buying was slightly above average.

Mind you, in 2020, central banks purchased about 255 tonnes of gold. This was the lowest annual amount they purchased in a decade. However, during that year, they had many problems to deal with. In 2021, central banks purchased over 463 tonnes of gold. That should give you an idea of how much they are in need of gold.

Which central banks have been buying gold?

It hasn’t been the U.S. Federal Reserve or other major central banks like the European Central Bank (ECB). The big central banks already have a lot of gold. It’s the smaller ones that have ramped up their gold purchases.

In the second quarter of 2022, the Central bank of Iraq was one the biggest gold buyers. The central banks of Argentina, Ecuador, Egypt, India, Ireland, Poland, Serbia, and Turkey have also been active gold buyers so far this year.

Moreover, there have been interesting developments in some gold-producing countries. For example, in June of this year, the Central Bank of Bolivia proposed a law that would make it the sole buyer of domestically produced gold.

Another point worth mentioning: the recently appointed governor of the Czech National Bank, Aleš Michl, proposed that the bank’s gold reserves increase from 11 to 100 tonnes or more. Why? To increase the returns of the official reserve. It’s good for diversification and doesn’t have a correlation with the stock market.

[lovewinshatelosses] 30/8/2022 12:26

This is a market reaction to J Powell's recent update IMO. Goldies selling off everywhere as far as I can see, although it is quite a move for PAF, so hopefully nothing company-specific. I would be a buyer at this price, but recently took a position in NEM, so more than enough PM exposure for now. Watching closely though...

[gekks] 30/8/2022 11:44

I'm a very LTH and will remain so but it seems to me the share buybacks were a complete waste.

[kickingking] 30/8/2022 11:43

Bought this morning as can not find any information for the drop. Dividend is up so can see these rise up in due cause. Will put a stop loss in once they are above 20p.

[cinoib] 30/8/2022 10:40

very big drop today so no apparent reason as gold only of a couple of $.

[stonedyou] 24/8/2022 08:42

People in Kuwait buy 9 tons of gold in bullion and coins over 5 months as a safe investment.

August 23, 2022.


Kuwaitis and residents over the past six months have reportedly bought 9 tons of gold coins and gold works, which is the same value as purchases during the first half of 2021, but it is crystal the customers prefer to buy in bullion and coins as a safe investment instead of going for works that are treated as decoration.

The World Gold Council, according to a local Arabic daily, said Kuwait’s purchases during the first half of 2022 were 23.3%, or 2.1 tons of bullion and gold coins, while the works accounted for 76.7% of the total gold purchases by 6.9 tons.

In view of the global geopolitical factors in addition to the economic variables, on top of which comes the high inflation rates and the subsequent successive increases in interest rates by the US Federal Reserve, which increased the attractiveness of the dollar and the tendency towards saving. However, the gold market in Kuwait translated this into increases in the acquisition of bullion and gold coins, which reached its peak during the period from April to the end of June 2022, when it witnessed an increase of about 37.5%, and while the figures show that the first half of this year witnessed a decline in the acquisition of gold jewellery, the same variables played a role, after its purchases witnessed a decline in the first quarter of year, it rose again in the second quarter.

The demand for gold bullion and coins in Kuwait during the first 6 months of this year increased by about 11%, with a volume of 200 kilograms, with total purchases of Kuwait amounting to 2.1 tons, compared to 1.9 tons during the same period (the first 6 months) of 2021.

In comparison on a quarterly basis, the period from April to the end of June 2022 witnessed an increase in bullion and coin purchases by 100 kilos, recording 1.1 tons compared to 1 tons during the period from January to the end of March of the same year.

[stonedyou] 23/8/2022 19:53

Gold consumption soars during festival.


Gold consumption in the nation during Chinese Lunar New Year boomed, indicating rosy growth prospects, with promotions from retailers and relatively low prices enhancing the attractiveness of the precious metal for many Chinese consumers, the World Gold Council said.

During the Spring Festival break in the first week of February, gold jewelry consumption in Shanghai reached 1.1 billion yuan ($171.8 million), up 12 percent year-on-year. As it is the Year of the Tiger, tiger-themed gold products and heritage gold jewelry were popular, the Shanghai Gold Jewelry Association said.

In the first 15 days of the first month of the Chinese lunar calendar, consumption of gold in China went up by 12 percent year-on-year, the council said.

Due to sporadic outbreaks of COVID-19 variants in different regions in the country, many Chinese travelers chose to cancel their travel plans and stay put during the Spring Festival holiday. Their freed-up travel budgets may have provided a further boost to gold jewelry purchases, the council said.

"We remain relatively positive on the 2022 outlook for gold demand in China, despite the possibility of a slowdown in the country's economic growth," said Ray Jia, senior analyst on China for the World Gold Council.

Compared to other markets, China's gold jewelry market shows a higher price transparency, and young Chinese consumers have shown an increasing interest in gold jewelry, fueled by their shifting tastes and mindset toward gold jewelry as an investment and a consumer product.

[2vdm] 23/8/2022 08:03

I don't know anything about crypto, but I think the gold price drop has been overdone. PAF is in a good position and when/if the market falls, I will add more. Like the company and well managed in my view.

[doneinthree] 22/8/2022 14:05

Gold still struggling
It all really related to fed in America.

[stonedyou] 21/8/2022 15:15

India boosts gold purchases.

Bullion imports soared by more than 6% from April to July, contributing to a growing trade deficit.


Purchases of gold by India, the world’s second-biggest importer of the precious metal, have seen a surge of 6.4% and amounted to $12.9 billion from April to July, according to official data revealed on Friday.

The nation’s gold imports reportedly stood at $12 billion during the same period a year ago.

The latest surge in gold and oil imports contributed to a record trade deficit of $30 billion reported in the first four months of this year, compared to $10.63 billion between April and July 2021.

In June, the Reserve Bank of India reported a wider trade gap during 2021-22 that expanded the country’s Current Account Deficit (CAD) at 1.2% of GDP against a surplus of 0.9% in the previous fiscal year.

For the January-March quarter, the CAD narrowed on a sequential basis to $13.4 billion, or 1.5% of GDP, against $22.2 billion, or 2.6% of GDP, in the October-December 2021 quarter.

The nation ramped up its exports of gems and jewelry during the first four months of the current fiscal year to $13.5 billion, representing growth of nearly 7%.

[stonedyou] 18/8/2022 20:29

China ramps up gold buying – Bloomberg.

Imports from Switzerland have jumped to their highest level since 2016.


China shipped in more than 80 tons of gold from Switzerland last month, Bloomberg reported on Thursday, citing data from the Swiss Federal Customs Administration. The volume is reportedly more than double the June total, and eight times more than in May.

The surge in gold imports to a five-year high indicates that Chinese demand for the precious metal is picking up, after a lull due to Covid lockdowns in the country’s major cities.

“The market’s still not great, but it’s definitely a lot better than it was in April,” Nikos Kavalis, managing director at Metals Focus consultancy, explained to Bloomberg.

The report highlighted that Chinese prices for gold carry a premium of roughly $7 compared to international prices, encouraging investors in China to step up imports, which requires a state-issued license.

Global gold prices slipped below $1,700 an ounce in July from more than $2,000 earlier in the year, as rising interest rates triggered selling by Western investors.


"The Gold market is bit sketchy, and the official numbers not always accurate. China is busy accumulating physical gold similar to central banks around world have been net buyers of gold for over 10 years. China, besides its public buying of Swiss finished product ( notice they cut LONDON LBMA out of purchases? ) China also is one largest gold producers and that domestic production remains mostly in China. The next major currency for trading worldwide is suggested to be a combination of all Brics and commodities and gold backed. That announcement when it is completed, will send US dollar into toilet and expose the dirty financial games New York and London have been playing for many decades. IN the US, debt exceeds 100% of GDP, and the economy tanks via inflation and recession, your going to have major selling going forward. China is and has been ahead of this event for long time. One day when Brics are finished putting together their alternative systems to US dollar hegemony, they may well announce their true gold holdings and expose West."

[stonedyou] 14/8/2022 21:47

Posted on August 14, 2022 by USAGOLD.

Sunday In-Depth.

The avalanche of history ‘It’s a very, very difficult place for us to be in.’

“[A] belated tightening of monetary policy by the world’s most important central bank, the Federal Reserve, inflicts a sort of regime change not only on US households and businesses, but on the rest of the world, too,” writes historian Niall Ferguson in a recent Bloomberg opinion piece. “All the consequences of these two shocks — one geopolitical, the other economic — are very hard indeed to predict, but I am confident that we have seen only a small proportion of them so far.”

In testimony before the British Parliament this past May, Bank of England governor Andrew Bailey admitted he felt “helpless” in the face of what has become runaway inflation. In doing so, he may have framed a new conundrum for central bankers everywhere – taming what increasingly looks like an untameable course of events. Unlike the Fed, which is raising rates and unwinding its balance sheet in the face of a slowdown, Bailey says BoE will not be selling government bonds in a time of economic turmoil. “It’s a very, very difficult place for us to be in,” he says.

Gold, as you can see in the chart immediately below, has held up well in response to what Ferguson calls the avalanche of history, while other assets covered in his lengthy analysis – most notably stocks, bonds, and bitcoin – have declined sharply. Commodities have been the star performer by far, and under such circumstances, we might have expected more from gold. Then again, it’s early in the game. Ferguson identifies the 1970s as the closest comparison to the present period but says “the analogy is far from perfect.” Like the 1970s, though, we should not “expect a rapid return to stability, whether in macroeconomic or geopolitical terms,” he says.

“For most of the past year,” writes Wisdom Tree, the Dublin-based financial firm, “gold has been ignoring the red-hot inflation that we have been living in.… It’s as if gold has been living in an alternate universe.” Now, though, it believes gold has reached a turning point. Its consensus forecast has the metal at $2315 by the first quarter of 2023. Its bullish scenario, based on sticky near double-digit inflation and a sharp correction in the dollar index, puts it at $2680. Its bearish forecast, which would result from the Fed successfully taming inflation, puts it at $1790.

[bluemango] 12/8/2022 16:24

Let us know how you get on and if you find a way through the admin obstacles.

I like the company a lot and this 20% WHT is a real pain, particularly as I invest mainly for income.

[af004] 12/8/2022 16:21

Thank you both - will try again!

[bluemango] 12/8/2022 16:17

I went through that correct process with the right paperwork, but got no joy with it.

Three different providers/holdings, all of them had same answer - their admin couldn't accommodate the double taxation arrangement with South Africa and I ended up having the full 20% WHT deducted at source. Despite all the correct paperwork. Their answer was generally that it couldn't work with nominee holdings because they are pooled. Couldn't be claimed back in retrospect either. Different from companies with US withholding tax where apparently it's more cost effective for them to do the extra admin via the W8BEN form.