£239.1m market cap
10.7p last close
Pan African Resources has four major producing or near-producing precious metals assets in South Africa: Barberton (targeting 95koz Au pa), Barberton Tailings Retreatment Project (20koz), Evander Tailings Retreatment Project (10koz) and Elikhulu (55koz).
Investment summary
With 1.08p of EPS derived from continuing operations and 160.4koz of production, PAF’s FY18 results were ahead of our expectations. The closure of Evander underground will cost PAF c 49koz pa in lost production. However, it will be more than made up for by Elikhulu, which is now operating at full capacity and will propel EPS towards c 2p/share. In the meantime, interim production of 81koz puts PAF well on course to meet its production guidance of 170koz for FY19.
Y/E Jun |
Revenue (£m) |
EBITDA (£m) |
PBT (£m) |
EPS (p) |
P/E (x) |
P/CF (x) |
|---|---|---|---|---|---|---|
| 2017A | 167.8 | 32.4 | 19.4 | 1.22 | 8.8 | 5.6 |
| 2018A | 154.2 | 14.8 | 2.4 | 1.60 | 6.7 | N/A |
| 2019E | 160.1 | 54.5 | 31.8 | 1.09 | 9.8 | 4.4 |
| 2020E | 187.1 | 79.2 | 58.2 | 1.83 | 5.8 | 2.7 |
| Last updated on 19/02/2019 | ||||||
Industry outlook
Additional near-term opportunities include the the Fairview sub-vertical shaft project (adding 7-10koz to production pa), the Royal Sheba project (c 30koz pa) and Egoli (optimised 34% IRR and ZAR1.04bn pre-tax NPV). Our all-in valuation of PAF is currently 17.01p/share plus the value of c 20.1m underground Witwatersrand ounces (which could add a further 0.17–4.15p/share). In addition, it remains cheaper than its peers on at least 91% of common valuation measures and has the eighth-highest prospective dividend yield globally.
Last updated on 19/02/2019
Sector |
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| Metals & mining |
Share price graph
Balance sheet |
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| Forecast net debt (£m) | 88.8 |
| Forecast gearing ratio (%) | 70 |
Price performance
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Key management |
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| Keith Cousens Spencer | Chairman |
| Cobus Loots | CEO |
| Deon Louw | FD |
