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Share Name Share Symbol Market Type Share ISIN Share Description
Pan African Resources Plc LSE:PAF London Ordinary Share GB0004300496 ORD 1P
  Price Change % Change Share Price Shares Traded Last Trade
  -0.78 -3.79% 19.82 1,661,160 16:35:14
Bid Price Offer Price High Price Low Price Open Price
19.70 19.80 20.55 19.58 20.55
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Mining 221.29 42.14 1.86 10.5 443
Last Trade Time Trade Type Trade Size Trade Price Currency
17:50:29 O 18,280 19.82 GBX

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14/8/202221:47Pan African Resources a sleeping giant1,196
28/7/202221:14Pan African Resources for 2006 (PAF) Moderated12,766
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13/10/201412:52Evander grade nadir portends future growth-

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Pan African Resources Daily Update: Pan African Resources Plc is listed in the Mining sector of the London Stock Exchange with ticker PAF. The last closing price for Pan African Resources was 20.60p.
Pan African Resources Plc has a 4 week average price of 18.04p and a 12 week average price of 18.04p.
The 1 year high share price is 24.50p while the 1 year low share price is currently 14.84p.
There are currently 2,234,687,537 shares in issue and the average daily traded volume is 2,298,975 shares. The market capitalisation of Pan African Resources Plc is £442,915,069.83.
stonedyou: Valuation: Up c 22% to (potentially) 65.36c/share Pan African is cheap relative to both its historical trading record and its peers. Our core valuation of the company is 44.67c/share (37.18p/share), based on projects either sanctioned or already in production, including Mogale. However, this rises by a further 15.67–20.69c (13.04–17.22p) once other assets (eg Egoli) are also taken into account. Alternatively, if Pan African’s historical average price to normalised EPS ratio of 8.9x in the period FY10–21 is applied to our FY22 and FY23 forecasts, it implies a share price of 37.83p in FY22, followed by 40.78p in FY23. In the meantime, it remains cheaper than its principal London- and JSE-listed peers on at least 69% of commonly used valuation measures.
cinoib: Let's hope this rise in the gold price translates into share price rise tomorrow or whether it is just a Jubilee rally.
stonedyou: Central Banks Buying Gold Could Be Catalyst for $3,000 Gold Price. Why Central Banks Might Send Gold Prices Soaring. If you’re trying to figure out where gold prices are headed next, you can’t ignore central banks. They could be one of the biggest catalysts to take gold prices to $3,000 per ounce much sooner than expected. Central banks have been buying gold for years, and it doesn’t look like they’ll stop anytime soon. Here’s the kicker: it’s not the major central banks that have been buying the yellow precious metal lately; it’s the smaller ones. The major central banks already own a lot of gold. Central banks don’t make an announcement before buying gold for their reserves. They buy it first and announce it later. Central banks’ actions have been speaking louder than words, saying they want more gold. They’ve been net buyers of the yellow metal since 2010. In the first quarter of 2022, they bought gold again, 84 tonnes of it. That’s a slightly lower amount than during the same period a year ago, but they remain buyers. (Source: “Gold Demand Trends Q1 2022,” World Gold Council, April 28, 2022.) Egypt’s central bank purchased 44 tonnes of gold in the first quarter 0f 2022, taking its gold reserves to 125 tonnes. Turkey bought 37 tonnes of the yellow metal, so now that country’s reserves stand at more than 430 tonnes. Over the past few quarters, India’s central bank has also been an active gold buyer. India added six tonnes of gold to its reserves in the first quarter of 2022, so its gold reserves now amount to 760 tonnes. Ecuador bought three tonnes of gold bullion from small, local gold producers in the first quarter. The Bank of Ghana announced a gold purchase program in June 2021, with a goal of increasing its gold reserves from nine to 17 tonnes by 2026. Ghana’s central bank said it had purchased 600 kilograms of gold under that program. Moreover, the central bank of Russia announced that it will resume its gold-buying program. In the past few years, Russia’s central bank has been one of the most resilient central banks in terms of purchasing gold. It bought gold no matter the price. The Russian central bank currently holds about 2,300 tonnes of gold. Gold Price Outlook: If You Own It, Solid Rewards Might Be Ahead. Dear reader, what central banks are doing these days when it comes to purchasing gold is grossly underreported in the mainstream media. It doesn’t get reported much because the gold market is considered boring, not like hot technology stocks or cryptocurrencies. Central banks need gold as the world becomes more polarized and currencies get questioned. The yellow precious metal has a history of preserving wealth in times of currency devaluation and crisis. Central banks know this well. They hold a lot of currency in their reserves and will need a lot of gold to hedge against volatility. This will help gold prices get to $3,000 per ounce. Given what central banks did in the first quarter of 2022, my stance on gold is as bullish as ever. Over the past few months, gold prices have held at the level between $1,800 and $1,900. There could be a solid base building, and I wouldn’t be surprised if, in a few years, we look back at these prices and say, “Wow, gold was cheap.”
stonedyou: 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
johnbull1: 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+).
stonedyou: MARKET SPOTLIGHT. Powell vs. Putin: Whose influence is stronger for gold? While geopolitical events can give the gold price a short-term boost, the effect can quickly wear off. Gold is seen as a safe haven, and while geopolitical tensions are high, gold can benefit. The gold price has moved ~$100/oz higher this year as tension has built between Russia and the US and EU over Ukraine. The gold price jumped last Thursday as the situation escalated, but gave back those gains on Friday. There is still uncertainty over how long the crisis might last, and that could keep the gold price supported for a while. However, once the situation in Ukraine stabilises, the gold price could slip further. In 2014, when Russia annexed Crimea, the price rallied while tensions built, but declined once the annexation had occurred. The Federal Reserve is expected to start raising interest rates at its next meeting in March. The market estimate is 67% for a 25 bp rise and 33% for a 50 bp rise. This slow move towards less accommodative monetary policy has allowed inflation to take off, with headline inflation reaching 7.5% in the US in January. Monetary tightening might not be bad for gold. Previously, when the Federal Reserve has started to raise interest rates, gold has generally risen in price in the following 6 and 12 months. Since the 1980s, rate hiking cycles beginning in 1986, 1999, 2004 and 2015 were all followed by rising gold prices, with gains of 10-20% over the next six months. The exceptions were 1983 when the price fell by over 11% and 1994 when the price slipped by. Real interest rates are deeply negative, and are likely to stay negative even with the Fed raising rates. While inflation may ease, it is likely to stay well above the Fed’s 2% target for some time. Escalating energy prices have contributed to high headline inflation and the year-on-year gains may become smaller as 2022 progresses. However, core inflation, which excludes food and energy, is also high at 6.0% in the US in January. This shows that the drivers of inflation are broader than just commodity prices. The gold price looks undervalued compared to how low real interest rates are, and this could support a higher gold price even without the safe-haven boost from geopolitical tensions.
stonedyou: THE INFLATION BEAST IS BIGGER THAN YOU THINK IT IS. OUR TOP ISSUES. Inflation is on the rise. For instance, in the US, consumer goods prices rose by 7.5 per cent in January 2022 compared to the previous year. In the euro area, annual consumer goods price inflation was 5.1 per cent in December last year. In many countries, the prices of, e.g., producer and wholesale goods, as well as food prices, are rising even more. In particular, energy prices are skyrocketing. As always in times of price inflation, people are debating two questions. The first question: Is rising price inflation temporary or permanent? A few months ago, many people thought elevated price inflation would be temporary, that it would return to normal soon. At the time of writing, the consensus is that price inflation will remain elevated longer than previously expected but will eventually return to acceptable levels around 2 per cent. Is that a reasonable expectation? This brings us to the second question: What is the cause of price inflation? Mainstream economists usually point to the impact of the politically dictated lockdown crisis (production halts, logistical bottlenecks, etc.) and ‘green policies’, which, they argue, have been driving goods prices up. While this is undoubtedly true, an important inflation driver is overlooked: the excessive increase in the quantity of money. For instance, the US Federal Reserve (Fed) has increased the money stock M2 by 40 per cent since the end of 2019. In the euro area, the European Central Bank (ECB) has raised the M3 money stock by around 20 per cent. This, in turn, has created an enormous ‘monetary overhang’ that is now translating into higher goods prices – both consumer and asset prices. To cloud the inflation outlook further, money growth rates have remained high. But wait: Central banks have announced that they will take their foot off the monetary accelerator. The Fed is now expected to start raising interest rates in March, followed by quite a few more rate hikes later this year. The ECB is also expected to change course, ending its hyper-expansive monetary policy in the coming quarters. Will it be enough to dampen price inflation? Probably not. Because central banks are faced with a delicate trade-off: bringing down price inflation would require substantially high(er) real interest rates to rein in credit and money supply growth. This, however, would presumably cause the debt pyramid in the global financial system to collapse. This is, of course, politically highly undesirable.
hjs: If we close above 20p today, than the phycological barrier will be passed and the share price will move to 25p imo. Todays RNS is excellent and the gold price is going up so there is no excuse for the share price to stay under 20p. Let's see what happens by the end of the week.
stonedyou: Historical relative valuation Exhibit 12, below, depicts PAF’s average share price in each of its financial years from FY10 to FY21 and compares this with normalised HEPS in the same year. For FY22 and FY23, the current share price (17.50p) is compared with our forecast normalised HEPS for FY22 to FY23. As is apparent from the graph, Pan African’s price to normalised HEPS ratio of 4.8x and 4.7x for FY22 and FY23, respectively (based on our forecasts, see Exhibit 18) is close to the bottom of its recent historical range of 4.1–14.8x for the period FY10–21: Stated alternatively, if PAF’s average Year 1 price to normalised EPS ratio of 8.9x for FY10–21 is applied to our normalised earnings forecasts, then it implies a share price for PAF of c 32.15p in FY22 followed by 32.99p in FY23.
stonedyou: Mintails/Mogale One of the assets with the most immediate optionality in the company’s portfolio is Mintails/Mogale, which could yet prove very similar in nature to Elikhulu, and into which PAF is conducting due diligence with a view to acquiring it. On 6 November 2020, PAF announced it had entered into a conditional agreement with the liquidator of Mintails’ assets for the purchase of the total share capital and associated loans of Mogale Gold and Mintails SA Soweto Cluster. Due diligence has been extended until January 2022. In the meantime, Pan African has successfully concluded both a fatal flaw analysis and a high-level financial evaluation of the project (which would be similar in nature to Pan African’s flagship Elikhulu project). In July, it subsequently completed a pre-feasibility study (PFS) on the Mogale Gold assets. Key outcomes of the PFS (cf the financial evaluation) are as follows: ■ An optimal throughput feed of c 0.8Mtpm (unchanged; cf Elikhulu’s 1.2Mtpm). ■ An all-in sustaining cost of US$1,087/oz (cf US$800/oz). ■ An NPV10.71 of ZAR849m, or US$56.6m, at a gold price of US$1,690/oz and a forex rate of ZAR15.00/US$ (cf ZAR1,469m, or US$101.3m, at a gold price of US$1,770/oz and a forex rate of ZAR14.50/US$); this equates to ZAR0.44/share (cf ZAR0.76/share), US$0.029/share (cf US$0.053/share) or £0.021 (cf £0.038/share). ■ Initial project capital of ZAR1,991m, or US$132.7m at ZAR15.00/US$, and life of mine capital of ZAR3,022m, or US$201.5m (cf ZAR1,000m, or US$68.9m at ZAR14.50/US$, and life of mine capital of ZAR1,700m, or US$117.2m). ■ Average annual production of 40-50koz pa (cf 44.4koz pa). ■ An 11-year life of mine (cf 12 years). ■ A real pre-tax internal rate of return of 22% (cf a post-tax internal rate of return of 42.8%). While not explicitly reported in the results of the PFS, metallurgical recoveries were estimated to be c 53% in the initial financial evaluation (cf Elikhulu’s 48%). In the meantime, by way of comparison, investors should note that Mintails’ and Mogale’s aggregate resource of 2.36Moz compares favourably to Elikhulu’s original resource of 1.7Moz and its initial reserve of 1.5Moz, but at a fractionally higher grade of 0.30g/t (cf Elikhulu’s 0.29g/t). PAF announced the results of an independent definitive feasibility study (DFS) on Elikhulu on 5 December 2016, which demonstrated an NPV9 of US$75.9m (or, then, 5.0c/share, or US$40.95 per resource ounce) at a gold price of US$1,180/oz and a forex rate of ZAR14.50/US$. At the time, we estimated Elikhulu to be worth US$69.9m (or 4.6c/share) at a 10% discount rate and to be capable of adding 1.33p to EPS in the first eight years of its operation (albeit there are now 28.0% more shares in issue). Now, however, with capex having been expended (albeit with not all associated debt having quite been repaid), we estimate a valuation for Elikhulu of c US$140.98 per initial resource ounce or US$185.19 per remaining resource ounce. As such, and albeit with suitable caveats such as the Mintails/Mogale assets developing in a similar fashion to Elikhulu, PAF could acquire for US$1.31/oz an asset that should be worth US$9.88/oz as an in-situ resource (see Gold stars and black holes, published in January 2019), could be worth US$23.98/oz (pre-development) and may be worth up to US$208.49 per remaining ounce (or US$126.23 per initial ounce), post-initial capex and debt repayment.
Pan African Resources share price data is direct from the London Stock Exchange
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