Pan African Resources


£265.9m market cap

11.9p last close

Pan African Resources has three major producing or near-producing precious metals assets in South Africa: Barberton (target output 95koz Au pa), the Barberton Tailings Retreatment Project (20koz) and Elikhulu (55koz) incorporating the Evander Tailings Retreatment Project (10koz).

Investment summary

Earnings and output in H1 were consistent with our full year expectations, with a 54% increase in gold produced from continuing operations and a 23% decline in AISC combining to result in a 117% increase in EPS in GBP. A subsequent operational update has confirmed production of 172,442oz in FY19 cf guidance of 170koz in FY19 and 185koz in FY20 (implying near 2p/share EPS).

Y/E Jun
Revenue (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2017A 167.8 32.4 19.4 1.22 9.8 6.2
2018A 154.2 14.8 2.4 1.60 7.4 N/A
2019E 163.1 46.6 26.0 0.99 12.0 4.3
2020E 202.6 81.8 59.1 1.88 6.3 3.4
Last updated on 19/09/2019
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), Egoli (optimised 34% IRR and ZAR1.04bn pre-tax NPV)and the 8 Shaft pillar project (US$25.8m pre-tax NPV), which is now expected to produce first gold in August. As a result, our all-in valuation of PAF has increased to 19.00p/share plus the value of c 19.2m underground Witwatersrand oz (which could add 0.17–4.15p/share). In the meantime, PAF remains cheaper than its peers on at least 66% of common valuation measures with a top tier dividend yield in prospect.

Last updated on 19/09/2019
Share price graph
Balance sheet
Forecast net debt (£m) 97.3
Forecast gearing ratio (%) 76
Price performance
Actual (8.5) 20.4 40.2
Relative* (10.9) 20.3 40.5
52-week high/low 14.5p/7.9p
*% relative to local index
Key management
Keith Cousens Spencer Chairman
Cobus Loots CEO
Deon Louw FD

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