Pan African Resources


£339.4m market cap

17.6p last close

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

Investment summary

Pan African (PAF) produced a forecast beating 179.6koz gold in FY20, resulting in net debt declining by 52.6% in H220 alone to just US$62.0m and allowing it to increase its dividend more than five-fold such that it is among the top 20 yielding precious metals companies, globally. Since then, EPS has almost doubled again to 2.11c/share in a record H121 after production of 98.4koz (cf FY21 guidance of 190koz).

Y/E Jun
Revenue (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2019A 218.8 65.5 37.1 1.64 14.8 7.8
2020A 274.1 115.2 80.8 3.78 6.4 6.4
2021E 357.0 157.1 122.2 4.24 5.7 3.4
2022E 336.2 177.1 151.4 5.43 4.5 2.8
Industry outlook

With the 8 Shaft pillar project having now achieved steady state, near-term development opportunities for PAF include Egoli (ZAR2.01bn NPV and 50.1% IRR), which has now been sanctioned, the Prince Consort shaft pillar, the Fairview sub-vertical shaft (adding 7–10koz to production pa) and the Royal Sheba project (c 30koz pa). In the meantime, its acquisition of Mintails’ assets holds out the possibility that it could develop another Elikhulu. Until then, we value PAF at 38.19c/share (27.46p/share) plus the value of c 19.2m underground Witwatersrand oz (estimated 0.22–5.24c/share).

Last updated on 05/05/2021
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Share price graph
Balance sheet
Forecast net debt (US$m) 29.8
Forecast gearing ratio (%) 13
Price performance
Actual 7.6 (22.1) 23.9
Relative* 3.2 (28.0) (0.3)
52-week high/low 27.1p/13.6p
*% relative to local index
Key management
Keith Cousens Spencer Chairman
Cobus Loots CEO
Deon Louw FD

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