£213.8m market cap
9.57p 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 prior FY19 expectations, with a 54.2% increase in gold produced from continuing operations and a 23.1% decline in AISC combining to result in a 116.7% increase in EPS in GBP. Compared to H218, Barberton, the BTRP and the ETRP all recorded substantial cost improvements. Most encouragingly, unit working costs at Elikhulu were 4.3% lower than projected and a similar performance in FY20 will propel EPS towards c 2p/share.
Y/E Jun |
Revenue (£m) |
EBITDA (£m) |
PBT (£m) |
EPS (p) |
P/E (x) |
P/CF (x) |
|---|---|---|---|---|---|---|
| 2017A | 167.8 | 32.4 | 19.4 | 1.22 | 7.8 | 5.0 |
| 2018A | 154.2 | 14.8 | 2.4 | 1.60 | 6.0 | N/A |
| 2019E | 164.9 | 51.7 | 31.1 | 1.14 | 8.4 | 3.2 |
| 2020E | 180.2 | 76.0 | 54.1 | 1.72 | 5.6 | 3.0 |
| Last updated on 22/05/2019 | ||||||
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), the 8 Shaft pillar project (US$19.4m pre-tax NPV) and Egoli (optimised 34% IRR and ZAR1.04bn pre-tax NPV). As a result, our all-in valuation of PAF has risen to 17.69p/share plus the value of c 19.2m underground Witwatersrand oz (which could add a further 0.17–4.05p/share). In addition, PAF remains cheaper than its peers on at least 70% of common valuation measures.
Last updated on 22/05/2019
Sector |
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| Metals & mining |
Share price graph
Balance sheet |
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| Forecast net debt (£m) | 94 |
| Forecast gearing ratio (%) | 73 |
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Key management |
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| Keith Cousens Spencer | Chairman |
| Cobus Loots | CEO |
| Deon Louw | FD |
