Pan African Resources Share Discussion Threads

[baldrick1] 04/11/2024 11:48

Should stay blue today ..treasury yields are down, and a cut in interest rates is imminent .

[baldrick1] 02/11/2024 07:46

Fantastic news

[baldrick1] 31/10/2024 15:08

It should go back up to the opening price if I'm a betting man.;)

[baldrick1] 31/10/2024 15:06

3000 dollars pog year end if not early 2025.too many wars going on...

[baldrick1] 31/10/2024 14:59

Thanks Mms for the drop .another large top upfor me.;)2025 will be a very prosperous New Year for gold miners.

[baldrick1] 31/10/2024 13:09

News out..very pleased announcement by the co. Gla

[thekobbler] 30/10/2024 20:28

Maybe they'll be an acquisition, and need a war chest?

[astjgroom] 28/10/2024 18:09

This Halloween budget and Trump spooking the markets

[stonedyou] 25/10/2024 13:31

FY24 and H224 results

PAF’s FY24 results, announced on 11 September, were closely in line with our forecasts

for headline EPS (HEPS) and EPS and also guidance, as provided in its announcements

of 29 July and 5 September.

Production in H224 was confirmed at 87,581oz, representing a 5.6% increase compared

with H223, while guidance for FY25 was reiterated at 215–225koz at an all-in

sustaining cost (AISC) of US$1,350–1,400/oz – not more than 3.4% higher than during

FY24 – albeit with the proviso that ‘the delay in the commissioning of Evander

Mines’ subvertical shaft, scheduled to be completed during September 2024, could

impact guidance by approximately 5,000oz’. Exhibit 1, below, shows Pan African’s

group production in H224 compared to H223 and H124, and also our forecast for a

further 12.1% output growth in FY25.

[stonedyou] 25/10/2024 13:29

Valuation: Still cheap compared to history and peers

We have pared back our core (absolute) valuation of PAF to its pre-May level of

40.93c per share (31.82p) to reflect both the recent, slightly uncharacteristic

‘above trend’ strength of the rand against both the US dollar and sterling and

slightly sticky cost inflation in H224. However, this valuation rises by a further

22.30–27.32c if other assets (eg Egoli and the Soweto cluster) are taken into

account. Alternatively, if PAF’s historical average price to normalised HEPS ratio

of 8.2x for the period FY10–24 is applied to our FY25 and FY26 forecasts, it implies

a value of 44.70p in FY25, followed by 41.17p in FY26. As such, PAF’s current share

price of 33.65p could be interpreted as discounting normalised HEPS rising to only

5.48c per share in FY25 and/or FY26 (cf our forecasts of 7.28c and 6.71c,

respectively). In the meantime, PAF remains cheaper than its principal London- and

South African-listed gold mining peers on at least 80% of commonly used valuation

measures, regardless of whether they are based on Edison or consensus forecasts.

Performing a relative valuation analysis, its peers imply a comparable valuation for

PAF of 61.03p based on our year one EPS estimate and 43.33p based on our year two

EPS estimate. Finally, we calculate that PAF is trading at an enterprise value of

just US$23.33 per resource ounce of gold.

[stonedyou] 25/10/2024 13:28

Higher production presages higher dividends

As well as increased earnings, PAF increased its dividend for the first time in four

years in FY24 and set a target of paying out 40–50% of net cash generated from

operating activities to shareholders. As a result, we believe that materially

increased dividend payouts are possible in the coming years. Our forecasts are

currently in the middle of the range of analysts’ expectations for FY25, but at the

top of the range for FY26. If achieved, however, we calculate that PAF would almost

certainly have the second highest dividend yield of the 62 precious metals mining

companies expected to pay dividends to shareholders globally over the next 12–24

months.

[stonedyou] 25/10/2024 13:27

Pan African Resources — Analysing H224 and looking forward to FY25

Pan African Resources’ (PAF’s) FY24 results, announced on 11 September, were within 1%

of our prior forecasts for both EPS (4.14c cf 4.17c) and headline EPS (HEPS; 4.15c

cf 4.17c). However, if the contract liability related to its ZAR400m financing

facility for Mintails is stripped out, we calculate that PAF would have recorded

HEPS of 5.27c, which would have been close to the top of the range of analysts’

expectations and also a record for both 12-month and six-month periods. While

arguably academic or FY24, this nevertheless sets the stage for more material EPS

and cash flow increases in the future as the Mintails contract liability concludes

in February 2025 at the same time that opex stabilises and capex begins to fall

away.

[stonedyou] 25/10/2024 13:22

PROFITABILITY GAP WIDENING

AS ANNUAL PRODUCTION RAMPS

UP TO ~250KOZ

• Well positioned to capitalise on increasing gap between
ZAR/kg gold price and ZAR AISC cost base

• Margin increased from ~28% in FY19 to ~ 33% in FY24

• Further upside as gold price maintains US$2,500/oz and
target AISC guidance at US$1,350-US$1,400/oz

• Increased output from low cost surface re-mining to
~45% of portfolio to further reduce overall AISC

• Improved free cash flow - potential to increase
dividends and pursue further growth opportunities

• Strong share price performance

[stonedyou] 25/10/2024 13:20

FINANCIAL PERFORMANCE

Excellent performance in FY24
• Average received gold price 11.3% to
US$2,015/oz (FY23: US$1,811/oz)

• Revenue  16.8% to US$373.8m
(FY23:US$319.9m)

• Profit for the year 30.2% to US$78.8m
(FY23:US$60.5m)

• HEPS 32.2% to US4.15cps
(FY23: US3.14cps)

• Adjusted EBITDAAPM  22.7% to US$141.2m
(FY23: US$115.1m)

• Robust balance sheet and strong financial
position at year end

• Net debtAPM of US$106.4m (FY23: US$22.0m)
while developing the MTR Project

• Liquidity remains healthy – access to cash and
undrawn facilities of US$95.0m
(FY23: US$84.7m)

• Sector leading dividend of US$26.8m proposed
(FY23:US$21.2m

[stonedyou] 25/10/2024 13:18

COST PERFORMANCE

Group AISC  3.4% to US$1,354/oz
(FY23: US$1,309/oz) – marginally above
guidance of US$1,325/oz – US$1,350/oz

• A sub-US$ inflation increase

• Substantially below global industry average of
US$1,414/oz for mid-tier producers

• ~84% of Group production (BTRP, Elikhulu,
Evander u/g and Fairview Mines) AISC of
US$1,170/oz

• Ramp up of production at MTR surface plant to
reduce Group AISC even further

• Cost savings from renewable energy of
US$2.2m at Evander

• Further future savings Fairview solar facility
commissioned in July 2024

• Target AISC for FY2024: between US$1,350 and
US$1,400/oz*

• Inflationary pressures to be offset by lowcost MTR production

[stonedyou] 25/10/2024 13:17

FY2024 KEY FEATURES

OPERATIONAL AND FINANCIAL PERFORMANCE


PRODUCTION PERFORMANCE

Group gold production of 186,039oz  6.2%
• Fairview and Sheba mines  13.5% to
65,580oz/yr
• Elikhulu  8.4% to 54,812oz/yr
• Optimisation and infrastructure improvements
positively impacted annual production
• Continuous operations at Fairview and
Sheba Mines
• BTRP LOM increased to 7 years,
new feedstock sources confirmed
• Evander Mines’ 24 Level – delays in subvertical shaft commissioning resolved
• Earlier steady-state MTR production
• Surface assets performed better than
anticipated, throughput and metallurgical
recoveries improved
• FY2025 guidance of 215,000oz to 225,000oz

[stonedyou] 25/10/2024 13:03

PERFORMANCE BY OPERATION

MTR PLANT COMMISSIONING IN PROGRESS
PERFORMANCE BY OPERATION
PROPOSED PROJECT EXECUTION TIMELINE
ACTIVITY ESTIMATED DATE
Completion and finalisation of DFS Completed ✓
Engineering optimisation activities Completed ✓
Detailed engineering optimisation Completed ✓
Funding package finalised July 2023 ✓
Environmental approvals for construction June-July 2023 ✓
Construction commenced July 2023 ✓
Expected commissioning Oct 2024
STEADY STATE PRODUCTION DEC 2024