Pan African Resources


Market Cap£334m

Last Close 17.4p

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).

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Investment summary

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 after production of 98.4koz in a record H121 with a further 103.2koz in output in H221 (cf our prior forecast of 95.8koz). Senior net debt declined another 45.5% to US$33.8m.

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 14.6 7.7
2020A 274.1 115.2 80.8 3.78 6.3 6.3
2021E 369.0 157.3 122.4 4.24 5.6 3.5
2022E 340.9 170.1 144.0 5.18 4.6 2.7
Industry outlook

We value PAF at 38.76c (28.04p) per share plus the 5.08cps upside potential from the development of Mintails/Mogale and the value of 19.2m underground Witwatersrand ounces (estimated 0.22-5.24c/share). Near-term development opportunities include Egoli (ZAR2.01bn NPV and 50.1% IRR), the Evander 8 Shaft Phase 1 (ZAR126.1m NPV) & 2 projects, Mintails (ZAR1.47bn NPV and 42.8% IRR), the Prince Consort shaft pillar, the Fairview sub-vertical shaft (7–10koz pa) and the Royal Sheba project (c 30koz pa).

Last updated on 03/08/2021
Content on Pan African Resources
Pan African Resources – Exceeding expectations (as usual)
Metals & mining | Update | 21 July 2021
gold flake
Pan African Resources – Record interim profitability
Metals & mining | Update | 3 March 2021
gold flake
Webinar: Pan African Resources
Metals & mining | Edison TV | 3 December 2020
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Share price graph
Balance sheet
Forecast net debt (US$m) 33.8
Forecast gearing ratio (%) 14
Price performance
Actual 0.5 (5.3) (28.7)
Relative* 0.1 (6.3) (41.2)
52-week high/low 27.1p/15.3p
*% relative to local index
Key management
Keith Cousens Spencer Chairman
Cobus Loots CEO
Deon Louw FD