Pan African Resources


Market Cap£303.1m

Last Close 15.72p

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

Pan African (PAF) announced its operational results for the year ended 30 June 2021 on 13 July, with output for the full year 6,609oz (3.4%) higher than PAF’s own guidance of 195,000oz from as recently as May 2021 and 7,383oz (3.8%) above Edison’s forecast. All of the substantive outperformance could be attributed to operations at Evander underground, which more than made up for an early shortfall in production in H121. Otherwise, group net senior debt was reported to be very close to Edison’s prior forecast, at US$33.8m, and production guidance for FY22 was confirmed at 195koz.

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 13.3 7.0
2020A 274.1 115.2 80.8 3.78 5.8 5.7
2021E 369.0 157.3 122.4 4.24 5.1 3.2
2022E 340.9 170.1 144.0 5.18 4.2 2.5
Industry outlook

Based on its currently producing assets, we value PAF at 38.19c (27.46p) per share plus 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’ assets (533koz over 12yrs at US$800/oz AISC), the Prince Consort shaft pillar, the Fairview sub-vertical shaft (7–10koz pa) and the Royal Sheba project (c 30koz pa). NB PAF’s mining rights at Barberton were recently renewed for a period of 30 years.

Last updated on 23/07/2021
Content on Pan African Resources
Pan African Resources – Exceeding expectations (as usual)
Metals & mining | Update | 21 July 2021
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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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Balance sheet
Forecast net debt (US$m) 33.8
Forecast gearing ratio (%) 14
Price performance
Actual (7.5) (12.4) (35.0)
Relative* (6.3) (13.0) (44.0)
52-week high/low 27.1p/15.3p
*% relative to local index
Key management
Keith Cousens Spencer Chairman
Cobus Loots CEO
Deon Louw FD