£422.3m market cap
21.9p 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’s production of 179.6koz gold in FY20 was 2.1% higher than our prior forecast, while earnings were within 5% of our expectations. At the same time, net debt declined by 52.6%, from US$130.7m to US$62.0m in H220 alone, which allowed PAF to increase its dividend more than five-fold such that it is now among the top 20 yielding precious metals companies, globally.
Y/E Jun |
Revenue (US$m) |
EBITDA (US$m) |
PBT (US$m) |
EPS (c) |
P/E (x) |
P/CF (x) |
|---|---|---|---|---|---|---|
| 2019A | 218.8 | 65.5 | 37.1 | 1.64 | 18.2 | 9.6 |
| 2020A | 274.1 | 115.2 | 80.8 | 3.78 | 7.9 | 7.8 |
| 2021E | 307.9 | 153.6 | 129.5 | 6.42 | 4.6 | 4.5 |
| 2022E | 316.0 | 164.5 | 142.1 | 6.42 | 4.6 | 3.6 |
Industry outlook
With the 8 Shaft pillar project having achieved steady state in May, 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 two Mintails assets holds out the possibility that it can recreate another Elikhulu. In our most recent note, we valued PAF at US$0.4048/share (31.31p/share) plus the value of c 19.2m underground Witwatersrand oz with an estimated value of 0.22–5.24c/share.
Last updated on 27/01/2021
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| Metals & mining |
Share price graph
Balance sheet |
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| Forecast net debt (US$m) | 16.5 |
| Forecast gearing ratio (%) | 6 |
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Key management |
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| Keith Cousens Spencer | Chairman |
| Cobus Loots | CEO |
| Deon Louw | FD |
