Pan African Resources Share Discussion Threads

[stonedyou] 01/2/2023 16:22

Data to 31 December 2022.

Highlights

2022 saw a record annual average LBMA Gold Price PM of US$1,800/oz. The gold price closed the year with a marginal gain, despite facing notable headwinds from the strong US dollar and rising global interest rates. Although the Q4 average price was slightly weaker both q-o-q and y-o-y, a sharp November rally was followed by continued recovery throughout the closing weeks of the year.

Brisk retail investment lifted bar and coin demand to a nine-year high. Strong growth in Europe, Turkey and the Middle East offset a sharp slowdown in China, where demand was affected throughout the year by COVID-related factors.

Indian gold demand remained robust compared with longer-term pre-pandemic levels. Despite a fairly soft start to the year, Indian consumer demand recovered and only just fell shy of the strong levels of demand seen during 2021. Continued recovery from COVID-19 boosted yearly comparisons, although the sharp local price rally choked off demand in the closing weeks of December.

Total gold supply halted two years of successive declines in 2022, lifted by modest gains in all segments. Full-year mine production grew 1% but failed to match its 2018 peak. Annual recycling supply made only marginal gains, despite strong local currency price rises in many markets.

[stonedyou] 01/2/2023 16:20

Gold Demand Trends Full Year 2022...


2022: strongest year for gold demand in over a decade.

Colossal central bank purchases, aided by vigorous retail investor buying and slower ETF outflows, lifted annual demand to an 11-year high
Annual gold demand (excluding OTC) jumped 18% to 4,741t, almost on a par with 2011 – a time of exceptional investment demand. The strong full-year total was aided by record Q4 demand of 1,337t.

Jewellery consumption softened a fraction in 2022, down by 3% at 2,086t. Much of the weakness came through in the fourth quarter as the gold price surged.

Investment demand (excluding OTC) reached 1,107t (+10%) in 2022. Demand for gold bars and coins grew 2% to 1,217t, while holdings of gold ETFs fell by a smaller amount than in 2021 (-110t vs. -189t), which further contributed to total investment growth. Quarterly fluctuations in OTC demand largely netted out over the year.

A second consecutive quarter of huge central bank demand (417t) took annual buying in the sector to a 55-year high of 1,136t, the majority of which was unreported.

Demand for gold in technology saw a sharp Q4 drop, resulting in a full-year decline of 7%. Deteriorating global economic conditions hampered demand for consumer electronics.

Total annual gold supply increased by 2% in 2022, to 4,755t. Mine production inched up to a four-year high of 3,612t.



2022 gold demand almost matched the 2011 record

[justiceforthemany] 01/2/2023 15:25

JSE equivalent price is 16.75
Trading at a discount on LSE of 16.4p

[stonedyou] 01/2/2023 15:00

News Wire

Jan 31, 2023

Gold as Inflationary Hedge Makes Turkey World’s Biggest Buyer.



INVESTING

Commodities

Company News

News Wire
Jan 31, 2023

Gold as Inflationary Hedge Makes Turkey World’s Biggest Buyer
Kerim Karakaya and Beril Akman, Bloomberg New.



(Bloomberg) -- Turkey was the biggest buyer of gold among central banks last year, with households also rushing to buy the commodity to shield from geopolitical uncertainty and rampant inflation.

The central bank’s gold reserves were at the highest level on record, the World Gold Council said in a report Tuesday. The official figure was 542 tonnes, up by 148 tonnes.

Demand for jewelery in the country also increased and jumped 32% year-on-year in the last quarter of 2022. “Despite the rise in the local gold price during 4Q, soaring consumer inflation brought the investment motive to the fore,” the WGC said.

Turkey has stepped up its ambitions to produce more gold than the existing average of 35 tonnes annually over the last five years, President Recep Tayyip Erdogan said last week. “Together with oil, gold is one of the most imported items,” he said during the opening of a new gold mine facility in the country’s west.

“We have the reserves to meet at least half of the demand in this area.”

Gold is also a popular commodity among Turkish households who use it as a hedge against currency and inflation pressures.

Turkey’s consumer inflation accelerated to as high as 85% last year before falling to 64% in December, thanks to a range of unconventional monetary policies that saw interest rates fall despite rampant price growth. The Turkish lira depreciated by almost 30% last year.

The price of gold in lira terms increased by 40% on an annual basis, according to data compiled by Bloomberg.

After a US case against Turkey state lender Halkbank on failing to comply with sanctions against Iran, Turkey repatriated all its gold holdings from the US. According to the Turkish central bank’s 2021 annual report, gold is kept at the Bank of England, at Istanbul Stock Exchange and the central bank.

Turkey’s imports of precious metals and stones swelled by almost 600% in December 2022 compared with a year earlier, separate data on Tuesday from state statistics agency TurkStat show. Energy and gold are the main drivers of Turkey’s trade deficit, which widened by 42% in the same period.

©2023 Bloomberg L.P.

[stonedyou] 01/2/2023 14:54

Budget 2023 | Customs duty lowered on raw & semi-manufactured gold,
platinum.



While the Customs duty on coal, peat and lignite has gone up from 1 percent to 2.5

percent, the duty on gold (12.5 percent), gold dore (11.85 percent) and platinum

(12.5 percent) has come down to 10 percent.

[cinoib] 01/2/2023 13:23

Most goldies down again today. Fed decision in 10 mins I think so we what happens to gold then, but already starting to move up

[cinoib] 30/1/2023 17:46

In it's favour . I didn't see 1 gold stock positive today and Aaz was down 6% at one point. So needs to go in bottom draw for a while.

[justiceforthemany] 30/1/2023 16:47

We are encouraged by the progress made with the group’s growth projects. The Mintails acquisition was concluded in October 2022 and the senior debt funding for the construction of the project is expected to be finalised in April 2023.

“This asset is expected to significantly increase group gold production in the years ahead,” said Loots.

[justiceforthemany] 30/1/2023 16:45

ZAR gold price up 20% YOY
Still a growth stock with Mintails to come online soon
Cheap valuation at just 5x earnings
SP should be nearer 30p

[tuscan4] 30/1/2023 14:51

May be better to keep it in the ground and get maybe $200 an ounce extra.

[bc789] 30/1/2023 11:45

Full year production is maintained. Price of gold still rising. Just a minor setback.

[cinoib] 30/1/2023 09:45

Now we know why it has been dragging its feet for the past few weeks.

[tigerbythetail] 30/1/2023 09:15

Yes, a few bumps on the road in that RNS. But, pig picture, this is still a well-managed company. It'll get past this.

[linton5] 30/1/2023 07:46

Mmm a bit sticky reading there a lot of bumps on the road and many to come

[cinoib] 25/1/2023 19:12

Gold now up $10 from our close so maybe a ray of sunshine for tomorrow. We need something as seem to remember when gold at this price we were in the low 20' mark.

[cinoib] 24/1/2023 12:05

19/01 last year so we could see them tomorrow or Thursday.

[stonedyou] 24/1/2023 09:52

Berenberg raises Pan African Resource price target to 32 (27) pence - 'buy'

[stonedyou] 24/1/2023 09:14

SMALL CAP IDEA: Are smaller gold mining firms the better option for investors amidst near-record prices?

Gold is close to a record high price and might well be on course to break through the historic US$2,000 per ounce mark.

At the beginning of this week, the price was holding firm at just over US$1,920 per ounce.

The only time it’s ever been higher was a week earlier when the price briefly hit US$1,930.

At just over £1,550 per ounce, the sterling price is also nudging at records, although there was a run up towards current levels back in the spring of last year as the Russian invasion of Ukraine combined with chaos in UK domestic politics to encourage investors to move into haven assets.

The more creative of UK investors, though, haven’t just been buying physical gold or ETFs.

They’ve also been moving into equities.

The reasons are simple enough.

Most gold mining companies have cost bases which are reasonably fixed.

Inflation can move things around a little bit, especially if companies are overly leveraged towards oil for their energy costs.

But, in general, once the overall cost at which an ounce of gold is produced – the all-in sustaining cost – is established, it can often stay fairly stable.

And that means that at times when the gold price jumps up significantly – as it has done by almost US$300 per ounce since November – all the gains go straight to margin.

Big gold miners, like Endeavour and Barrick do well. But heavyweight investors are already well exposed to these.

It’s the mid-caps and smaller producers, like Caledonia Mining, Pan African Resources, Ariana Resources, Chaarat Gold, Resolute, Scotgold, Shanta and Serabi that tend to get the real boost.

But there’s often a delayed effect, as market sentiment catches up with fundamentals, and investors work out exactly where the best gains are to be had.

No two gold miners are alike of course, which is where the stock picking skill enters back into the equation.

Gold companies offer the production of a safe-haven asset with the corresponding downside of operational and - sometimes jurisdictional – risk.

But some companies have a better track record than others in this regard, and backing an experienced team is probably the key to making the right choices in this space.

In Southern Africa, both Caledonia Mining (1,135p) and Pan African (18p) look attractive and well-seasoned, boasting long track records of successful gold production and decades of experience of operating in the country – respectively Zimbabwe and South Africa.

Not easy jurisdictions at the best of times, and yet these companies make it work.

Caledonia has just completed the expansion of production at its long-lived Blanket mine in the south of Zimbabwe and is currently also absorbing the acquisition of the country’s largest undeveloped gold resource.

It’s managed to keep operating throughout the ups and downs of recent Zimbabwean history, to the extent where it’s now a significant player at a national level.

For its part, Pan African also has long years of experience operating in South Africa, keeping production going at some of the country’s most historic mines.

The chief executive Cobus Loots comes from a Black Economic Empowerment background and also has plenty of experience dealing with South Africa’s powerful mining unions.

Throughout the years Pan African has kept annual production at or around the 200,000oz mark, and although the mines haven’t always been easy to work, the company has managed to find a way through.

Shanta (12p), too, has had the occasional glitch in what’s generally been a strong performance over the years at its mines in Tanzania and, like Caledonia, it too has significant upside to the production profile in the shape of multi-million ounce exploration potential across the border.

In North Africa, Centamin (116p) comes in and out of favour in Egypt, while in Ethiopia it looks like KEFI (0.75p) might finally be about to get the long-awaited Tulu Kapi project off the ground.

Other existing London-listed producers that are worth a look include Chaarat (10.9p), which has been operating a mine in Armenia for some time, and which also has significant upside from developments in Kyrgyzstan; Serabi (38p), which has production in Brazil; Australian company Resolute (16p), which has a long track record of production in West Africa; and local champion Scotgold (40.5p), with its small mine in the Grampians.

And a hat-tip to Ariana Resources (3.4p), which has interests in small-scale production in Turkey.

Ariana has stayed the course over the years, where other mightier names have fallen, and has produced real returns for shareholders.

Aside from the hard cash it’s paid out when deals have gone its way, its shares are also up significantly over the past few years, although a re-rating in response to the latest strength in gold is only faintly in evidence.