Pan African Resources


£382.8m market cap

19.85p last close

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

Investment summary

H120 output of 92,941oz resulted in a 126.0% increase in pre-tax profit and normalised headline EPS of 1.18c. In the wake of the results, we valued PAF at 28.28c/share plus the value of c 19.2m underground Witwatersrand oz (estimated at 0.22–5.24c/share). South Africa was locked down from 26 March to 30 April, but is now beginning to emerge and PAF estimates that FY20 production will now amount to 176koz. Crucially, during the period of the lockdown, PAF was able to keep its surface operations (at which it generates >60% of its EBITDA) running at 70% capacity. It will also benefit from recent gold price strength and rand weakness.

Y/E Jun
Revenue (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2018A 145.8 38.1 29.3 1.31 18.9 84.0
2019A 218.8 65.5 37.1 1.64 15.1 8.0
2020E N/A N/A N/A N/A N/A N/A
2021E N/A N/A N/A N/A N/A N/A
Industry outlook

Near-term opportunities for PAF include the Fairview sub-vertical shaft (adding 7–10koz to production pa), the Royal Sheba project (c 30koz pa), Egoli (optimised 34% IRR and ZAR1.04bn pre-tax NPV), the extraction of the Prince Consort shaft pillar and the Evander 8 Shaft pillar project, which had been on the cusp of steady-state in March prior to the lockdown.

Last updated on 09/07/2020
Share price graph
Balance sheet
Forecast net debt (US$m) N/A
Forecast gearing ratio (%) N/A
Price performance
Actual 27.9 90.0 88.0
Relative* 33.8 83.2 130.2
52-week high/low 19.9p/9.0p
*% relative to local index
Key management
Keith Cousens Spencer Chairman
Cobus Loots CEO
Deon Louw FD

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