Pan African Resources — Valuation up 22.2% with new gold price forecasts

Pan African Resources (AIM: PAF)

Last close As at 15/06/2024

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Research: Metals & Mining

Pan African Resources — Valuation up 22.2% with new gold price forecasts

On 22 November, Pan African Resources (PAF) announced that operations to date in FY24 had performed in line with, or better than, expected, with gold production for H124 anticipated to be in the range 94,000–98,000oz (cf 92,307oz in H123). As a result, it increased its production guidance for FY24 to 180,000–190,000oz, which caused us to increase our production estimate in turn by 1.9% (or 3,575oz) to 189,725oz. The change made only a modest difference to our EPS forecasts for FY24 (see Exhibit 2). However, it increases our confidence in those estimates, which are already at the top of a relatively wide range of expectations.

Lord Ashbourne

Written by

Lord Ashbourne

Director of Content, Mining

Pan-African-Resources_resized

Metals & Mining

Pan African Resources

Valuation up 22.2% with new gold price forecasts

Operations update

Metals and mining

1 December 2023

Price

17.32p

Market cap

£332m

ZAR23.6501/£, ZAR18.7240/US$, US$1.2633/£

Net debt (US$m) at end-June 2023

22.1

Shares in issue

1,916.5m

Free float

85%

Code

PAF

Primary exchanges

AIM/JSE

Secondary exchanges

Level 1 ADR, OTCQX Best Market and A2X

Share price performance

%

1m

3m

12m

Abs

2.4

18.4

(6.6)

Rel (local)

(0.2)

18.6

(4.7)

52-week high/low

20.2p

12.0p

Business description

Pan African Resources has four major producing precious metals assets in South Africa: Barberton (target output 95koz Au pa), the Barberton Tailings Retreatment Project, or BTRP (20koz), Elikhulu (55koz) and Evander underground, incorporating Egoli (currently 30koz, rising to >100koz).

Next events

FY23 dividend payment

12 December 2023

H124 results

February 2024

FY24 results

September 2024

Mintails first production

Late 2024

Analyst

Lord Ashbourne

+44 (0)20 3077 5700

Pan African Resources is a research client of Edison Investment Research Limited

On 22 November, Pan African Resources (PAF) announced that operations to date in FY24 had performed in line with, or better than, expected, with gold production for H124 anticipated to be in the range 94,000–98,000oz (cf 92,307oz in H123). As a result, it increased its production guidance for FY24 to 180,000–190,000oz, which caused us to increase our production estimate in turn by 1.9% (or 3,575oz) to 189,725oz. The change made only a modest difference to our EPS forecasts for FY24 (see Exhibit 2). However, it increases our confidence in those estimates, which are already at the top of a relatively wide range of expectations.

Year end

Revenue (US$m)

PBT*
(US$m)

EPS*
(c)

DPS
(c)

P/E
(x)

Yield
(%)

06/22

376.4

117.2

4.44

1.04

4.9

4.8

06/23

321.6

92.9

3.54

0.95

6.2

4.3

06/24e

367.4

135.4

5.31

0.96

4.1

4.4

06/25e

406.7

150.4

6.00

0.96

3.6

4.4

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles and exceptional items.

Mogale on time and within budget

At the same time as announcing its production update, PAF reported that significant progress has been made with its new MTR plant at Mogale, with project construction progressing on time and within budget and commissioning still on track for the latter half of CY24. As such, we are continuing to forecast that PAF’s production will reach c 250koz per year in 2026.

Valuation: Up 22.2% to 42.27c (33.46p)

As a result of incorporating our updated gold price forecasts (see Gold: Shades of the 1970s, September 1979 revisited, published on 27 September) into our Pan African model, our core (absolute) valuation of the company has risen by 22.2% to 42.27c (33.46p), based on projects either sanctioned or already in production. This valuation rises by a further 21.74–26.76c if other assets (eg Egoli) are also taken into account. Alternatively, if PAF’s historical average price to normalised headline earnings per share (HEPS) ratio of 8.4x in the period FY10–23 is applied to our FY24 and FY25 forecasts, it implies a value of 35.29p in FY24, followed by 39.82p in FY25. As such, PAF’s current share price of 17.32p could be interpreted as discounting normalised HEPS falling to 2.61c per share (cf 5.31c/share and 6.00c/share forecast for FY24 and FY25, respectively). In the meantime, PAF remains cheaper than its principal London- and South African-listed gold mining peers on at least 97% of commonly used valuation measures if Edison’s forecasts are used and 86% of the same measures if consensus forecasts are used, which collectively imply a share price of 37.16p on the basis of our year one EPS estimate and 43.50p based on our year two EPS estimate. Separately, we estimate that PAF has the ninth highest dividend yield of the 61 precious metals mining companies expected to pay dividends to shareholders in the next 12 months, globally. Finally, its enterprise value equates to just US$11.42 per resource ounce of gold.

Production update

On 22 November, Pan African provided the market with an interim production update, the highlights of which are as follows:

Operations to date in FY24 have been performing in line with, or better than, anticipated, with gold production for H124 expected to be 94,000–98,000oz (cf 92,307oz in H123), an increase of 2–6%. Within that:

Barberton Mines’ underground production is expected to be 37,000–38,000oz (cf 32,022oz), partly as a consequence of the implementation of continuous operations when compared to the prior period.

Evander Mines’ underground production is anticipated at 20,000–21,000oz (cf 19,173oz), as a result of higher-grade ore from 24 Level and improved conveyor belt availability. In the meantime, equipping the ventilation shaft to hoist ore and waste from 24 to 26 Levels remains on track for commissioning in Q1 CY24.

Elikhulu: 27,000–28,000oz anticipated (cf 25,830oz).

Evander surface sources: 2,000oz anticipated (cf 5,270oz).

BTRP: 8,000-9,000oz anticipated (cf 10,012oz).

As a consequence of this H124 performance, PAF has increased its FY24 production guidance to 180,000–190,000oz (cf 178,000–190,000oz previously). In the light of PAF’s announcement, a summary of our updated half year production expectations for both H124 and H224 relative to our prior expectations is as follows:

Exhibit 1: Pan African production, H220–H224e (oz)

Operation

H220

H121

H221

H122

H222

H123

H223

FY23

H124e

H224e

FY24e

FY24e

(prior)

Barberton UG

31,392

42,350

42,476

39,991

35,747

32,022

32,564

64,586

37,500

36,500

74,000

73,000

BTRP

9,516

10,004

8,235

9,126

10,434

10,012

9,863

19,875

8,500

6,500

15,000

15,000

Barberton

40,908

52,354

50,711

49,117

46,181

42,034

42,427

84,461

46,000

43,000

89,000

88,000

Evander UG

9,117

12,607

23,409

27,312

21,538

19,173

10,359

29,532

20,500

27,225

47,725

48,150

Evander surface

6,176

6,560

4,677

5,756

3,564

5,270

5,373

10,643

2,000

1,000

3,000

-

Evander

15,293

19,169

28,086

33,068

25,102

24,443

15,732

40,175

22,500

28,225

50,725

48,150

Elikhulu

30,315

26,863

24,596

25,900

26,320

25,830

24,743

50,573

27,500

22,500

50,000

50,000

Total

86,516

98,386

103,391

108,085

97,603

92,307

82,902

175,209

96,000

93,725

189,725

186,150

Source: Edison Investment Research, Pan African Resources. Note: Totals may not add up owing to rounding. UG, underground. BTRP, Barberton Tailings Retreatment Project.

As such, we have increased our production forecast for FY24 by 1.9% to close to the top of PAF’s guidance range. Within that, our forecasts for the BTRP and Elikhulu appear conservative to the tune of c 2,000oz and 5,000oz respectively (on a pro rata basis). However, this is approximately balanced by the assumption of a 6,725oz pick up in production from Evander underground in H224 as a result of first output from the 25 and 26 Level project. However, readers should note that in FY24, we forecast production from the 25 and 26 Level project to be relatively low margin, while production from the BTRP and Elikhulu is forecast to be relatively high margin. To the extent that production at the 25 and 26 Level project is delayed into FY25 and pro rata production comes through from the BTRP and Elikhulu, our financial forecasts below, for FY24, may be considered conservative.


Updated FY24 financial forecasts

In the light of PAF’s updated group production guidance (and our associated assumptions), our financial forecasts for Pan African for both H124 and H224 have been modified as follows:

Exhibit 2: Pan African P&L statement by half year (H220–FY24e)

US$000s*

H220

H121

H221

H122

H222

H123

H223

FY23

H124e

FY24e

FY24e

(prior)

Revenue

141,258

183,751

185,164

193,574

182,797

156,489

165,117

321,606

189,033

367,366

359,009

Cost of production

(71,956)

(98,245)

(110,570)

(108,368)

(118,077)

(99,282)

(99,508)

(198,790)

(99,726)

(197,963)

(191,107)

Depreciation

(10,977)

(12,741)

(19,333)

(13,268)

(13,160)

(11,122)

(9,277)

(20,399)

(9,611)

(26,533)

(26,408)

Mining profit

58,325

72,766

55,260

71,938

51,560

46,085

56,332

102,417

79,696

142,870

141,494

Other income/(expenses)

(27,720)

(6,704)

(6,115)

(7,711)

(2,117)

(3,610)

(3,737)

(7,347)

(7,189)

(12,327)

(12,314)

Loss in associate etc

0

0

0

0

0

0

0

0

0

Loss on disposals

0

0

0

0

0

0

0

0

0

Impairments

(20)

0

0

0

(467)

0

0

0

0

Royalty costs

(266)

(2,404)

(1,050)

(1,316)

(780)

(468)

(495)

(963)

(5,325)

(2,926)

(2,801)

Net income before finance

30,319

63,657

48,096

62,910

48,197

42,007

52,100

94,107

67,183

127,617

126,380

Finance income

258

300

456

661

434

456

683

1,139

Finance costs

(5,587)

(3,946)

(3,729)

(1,945)

(3,381)

(3,464)

(6,228)

(9,692)

Net finance income

(5,329)

(3,646)

(3,273)

(1,285)

(2,946)

(3,008)

(5,545)

(8,553)

(2,272)

(4,557)

(1,986)

Profit before taxation

24,990

60,011

44,823

61,626

45,250

38,999

46,555

85,554

64,911

123,060

124,394

Taxation

(2,602)

(19,239)

(10,903)

(15,573)

(16,351)

(10,063)

(14,754)

(24,817)

(21,797)

(33,562)

(33,240)

Effective tax rate (%)

10.4

32.1

24.3

25.3

36.1

25.8

31.7

29.0

33.5

27.3

26.7

PAT (continuing ops)

22,388

40,773

33,920

46,053

28,899

28,936

31,801

60,737

43,194

89,497

91,154

Minority interest

(185)

(136)

(266)

(402)

0

0

0

Ditto (%)

(0.6)

(0.5)

(0.8)

(0.7)

0.0

0.0

0.0

Attributable profit

29,084

29,072

32,067

61,139

43,194

89,497

91,154

Headline earnings

22,416

40,772

33,919

46,053

29,551

29,072

31,392

60,464

43,194

89,497

91,154

Est. normalised headline earnings

50,136

47,476

40,034

53,764.1

31,668

32,682

35,129

67,811

50,383

101,825

103,467

EPS (c)

1.16

2.11

1.76

2.39

1.51

1.52

1.67

3.19

2.25

4.67

4.76

HEPS** (c)

1.16

2.11

1.76

2.39

1.54

1.52

1.63

3.15

2.25

4.67

4.76

Normalised HEPS (c)

2.60

2.46

2.08

2.79

1.65

1.71

1.83

3.54

2.63

5.31

5.40

Source: Pan African Resources, Edison Investment Research. Note: As reported basis. *Unless otherwise indicated. **HEPS, headline earnings per share (company adjusted basis).

As in previous periods, we expect the majority of taxation to be in the form of deferred taxes, with cash taxes paid amounting to less than half the total tax charge in both H124 and FY24.

Growth projects

PAF has at least two organic growth projects in prospect (namely the Mintails Soweto Cluster and Royal Sheba) for development in the immediate future. Beyond these, it also has at least the Fairview sub-vertical shaft, Rolspruit, Poplar and Evander South assets available for development.

Mintails

On 1 August, PAF announced that all conditions precedent for its ZAR1.3bn senior debt facility, designated for funding the group’s Mintails project, had been fulfilled, thereby completing the full upfront funding package of ZAR2.5bn. Since then, PAF reports that significant progress has been made with the MTR plant at Mogale, with commissioning still on track for the latter half of CY24. Within that:

Project construction is progressing on time and within budget.

Foundations for seven of the nine CIL tanks are now in place and the tower crane’s construction has commenced.

Environmental rehabilitation has commenced, including the clean-up of historical spillages and pipelines, wetlands’ remediation and removal of alien vegetation.

Royal Sheba

Mine layout optimisation and scheduling has now been finalised at Royal Sheba and requests for quotations issued for initial development and production activities. Preliminary optimisation work for life-of-mine planning has been completed at a cut-off grade of 1.7g/t, which implies an average mining grade of approximately 3.0g/t and c 235,000oz gold recovered over an eight-year life, with the orebody still open at depth and the potential for further extensions. In the meantime, DRA Global has finalised the feasibility study for placing a crushing and milling circuit at the Royal Sheba Mine site, together with the design to enable slurry pumping from the milling plant at Royal Sheba to the BTRP. The processing plant’s feasibility study and the project’s financial model are being updated and reviewed. A phased approach to capital spending, based on the availability of material to feed the BTRP plant, is also being considered, which will entail the phased development of the decline and production levels as well as the ventilation infrastructure required for initial stoping operations. First stoped ore is planned in 2025 at 5,000t per month, ramping up to 10,000t, 30,000t and 45,000t per month, every 12 months thereafter in line with a set lateral and vertical development schedule. A trucking cost trade-off analysis indicates that the onsite crushing and milling circuit and pipeline will only be required once production rates reach 45,000t per month. In the meantime, the internal feasibility study on the project is expected to be completed later in CY23.

Group production

In the wake of the company’s production update, our longer-term forecasts remain, to all intents and purposes, unchanged. As such, we are continuing to forecast that group production at PAF will reach c 250koz per year in 2026. In conjunction with higher assumed long-term gold price forecasts. However, we are now forecasting that this could push normalised HEPS beyond 6.00c per share and potentially as high as 9.00c per share (see Exhibit 5, below).

Exhibit 3: Estimated Pan African group gold production profile, FY18–29e

Source: Edison Investment Research, Pan African Resources

Updated (absolute) valuation

In deriving our updated forecasts and valuation for PAF, over the life of its operations, we have made a number of changes to our assumptions:

We have updated our gold price forecasts to reflect the conclusions of our report, Gold: Shades of the 1970s, September 1979 revisited, published in September, as shown below:

Exhibit 4: Edison real terms gold price forecasts (CY23, US$/oz)

Year

2024e

2025e

2026e

2027e

2028e

2029e

2030e

Gold price (2023 US$/oz, current)

1,822

1,851

1,869

1,912

1,722

1,596

1,725

Gold price (2023, US$/oz, previous)

1,819

1,749

1,681

1,617

1,555

1,555

1,555

Source: Edison Investment Research

We have adjusted our long-term foreign exchange rates (in real terms), to reflect the recent weakness of the dollar against both sterling and (albeit to a lesser extent) the rand:

From ZAR23.5744/£ at the time of our last note to ZAR23.6501/£ (+0.3%), being that prevailing at the time of writing.

From ZAR18.8868/US$ to ZAR18.7240/US$ (-0.9%).

From US$1.2483/£ to US$1.2633/£ (+1.2%).

We have updated our assumed profits and losses from the hedge relating to PAF’s synthetic forward sale of gold as part of the financing package for Mintails and Mogale. We have also added to this estimated profits and losses from PAF’s separate zero-cost collars, which form part of the company’s discretionary hedging policy. These are included in ‘other income/expenses’ on the group’s income statement.

In the aftermath of these changes, our absolute valuation of PAF (based on its existing four producing assets plus the 25 and 26 Level project and Mogale) has risen by 22.2% to 42.27c (cf 34.59c previously), which is based on the present value of the estimated maximum potential dividend stream payable to shareholders over the life of its mining operations (applying a 10% discount rate to US dollar dividends). In this case, ostensibly 100% of the increase in our valuation may be attributed to the increase in our assumed long-term gold prices (above).

Exhibit 5: PAF estimated life of operations’ diluted EPS and (maximum potential*) DPS

Source: Pan African Resources, Edison Investment Research. Note: *From FY26. Excludes discretionary exploration investment.

Stated alternatively, based on our long-term dividend forecasts, we calculate that an investment in PAF’s shares at a price of 17.32p today offers investors a (real) internal rate of return of 24.4% per year in US dollar terms to at least the end of FY39.

Including its other growth projects and assets, our updated total valuation of PAF as a whole is provided in Exhibit 6, below.

Exhibit 6: PAF absolute valuation summary

Project

Current valuation
(USc/share)

Previous valuation
(USc/share)

Existing producing assets (including 24 Level and 25 and 26 Level and Mogale projects)

42.27

34.59

FY23e dividend

0.96

0.95

Fairview Sub-Vertical Shaft project

1.03

0.83

Royal Sheba (resource-based valuation)

0.64

0.52

MC Mining shareholding

0.00

0.00

Sub-total

44.91

36.90

EGM underground resource

0.22–5.24

0.22–5.24

Sub-total

45.13–50.15

37.12–42.14

Egoli

16.99

14.66

MSC

1.89

1.40

Total

64.01–69.03

53.18–58.20

Source: Edison Investment Research. Note: Numbers may not add up owing to rounding.

Historical relative and current peer group valuation

Historical relative valuation

Exhibit 7 below depicts PAF’s average share price in each of the financial years from FY10 to FY23 and compares this with HEPS in the same year. For FY24 and FY25, the current share price (17.32p) is compared with our forecast normalised HEPS for those years. As is apparent from the chart, PAF’s price to normalised HEPS ratios of 4.1x and 3.6x for FY24 and FY25, respectively, are at and below the bottom of the range of recent historical P/E ratios of 4.1–14.8x for the period FY10–23:

Exhibit 7: PAF historical price to normalised HEPS** ratio, FY10–25e

Source: Edison Investment Research. Note: *Completed historical years calculated with respect to average share price within the year shown and normalised HEPS; zero normalisation assumed before 2016. **HEPS shown in pence prior to 2018 and US cents thereafter.

If PAF’s average year one price to normalised EPS ratio of 8.4x for the period FY10–23 is applied to our normalised earnings forecasts, it implies a share price for PAF of 35.29p in FY24 followed by one of 39.82p in FY25. Stated alternatively, PAF’s current share price of 17.32p, at prevailing foreign exchange rates, appears to be discounting FY24 and/or FY25 normalised HEPS falling to 2.61c per share (cf 5.31c and 6.00c forecast, respectively).

Relative peer group valuation

PAF remains cheaper than its London- and South Africanlisted gold mining peers on at least 97% of comparable common valuation measures (35 out of 36 individual measures in the table below) if Edison forecasts are used or 86% if consensus forecasts are used (31 out of 36 individual measures).

Exhibit 8: Comparative valuation of PAF with South African and London peers

Company

EV/EBITDA (x)

P/E (x)

Yield (%)

Year 1

Year 2

Year 1

Year 2

Year 1

Year 2

AngloGold Ashanti

7.2

5.1

16.5

10.9

1.4

1.7

Gold Fields

6.3

4.9

15.6

10.9

2.4

3.4

Sibanye Stillwater

3.1

2.6

8.3

6.6

3.1

6.1

Harmony

4.8

4.2

8.3

7.4

1.2

2.3

Centamin

3.3

3.0

8.9

10.3

3.3

3.8

Endeavour Mining (consensus)

6.0

5.4

22.1

15.9

3.5

3.5

Average (excluding PAF)

5.1

4.2

13.3

10.3

2.5

3.5

PAF (Edison)

2.7

2.3

4.1

3.6

4.4

4.4

PAF (consensus)

3.3

2.7

6.3

5.3

3.3

4.5

Source: Edison Investment Research, Refinitiv. Note: Consensus and peers priced at 30 November 2023.

Alternatively, applying PAF’s peer average year one P/E ratio of 13.3x to our normalised HEPS forecast of 5.31c per share for FY24 implies a share price for the company of 37.16p at prevailing foreign exchange rates. Applying its peer average year two P/E ratio of 10.3x to our normalised HEPS forecast of 6.00c per share implies a share price of 43.50p. Among other things, readers should note the significant expansion of these multiples since our last note (see Advancing to 250koz in annual output in FY26), published on 18 September 2023.

Readers’ attention is also drawn to the decline evident in the market’s year one yield estimate for PAF, which appears to suggest that it believes the company will cut its dividend in FY24 (or that the rand will fall very sharply versus the US dollar, but that this will not be reflected in the company’s results), which we regard as highly unlikely, except in extenuating circumstances.

Exhibit 9: Financial summary

US$'000s

2018

2019

2020

2021

2022

2023

2024e

2025e

Year end 30 June

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

145,829

218,818

274,107

368,915

376,371

321,606

367,366

406,673

Cost of sales

(107,140)

(152,980)

(158,457)

(208,815)

(226,445)

(198,790)

(197,963)

(212,896)

Gross profit

38,689

65,838

115,650

160,100

149,926

122,816

169,404

193,777

EBITDA

 

 

38,131

65,484

115,176

156,646

147,830

121,853

166,477

189,687

Operating profit (before GW and except.)

 

 

31,506

49,256

93,673

124,572

121,402

101,454

139,944

157,457

Intangible amortisation

0

0

0

0

0

0

0

0

Exceptionals

(16,521)

10,596

(28,593)

(12,819)

(10,295)

(7,347)

(12,327)

(6,622)

Other

0

0

0

0

0

0

0

0

Operating profit

14,985

59,852

65,079

111,753

111,107

94,107

127,617

150,835

Net interest

(2,222)

(12,192)

(12,881)

(6,919)

(4,231)

(8,553)

(4,557)

(7,085)

Profit before tax (norm)

 

 

29,284

37,064

80,791

117,653

117,171

92,901

135,387

150,372

Profit before tax (FRS 3)

 

 

12,763

47,660

52,198

104,834

106,876

85,554

123,060

143,750

Tax

2,826

(8,174)

(7,905)

(30,141)

(31,924)

(24,817)

(33,562)

(35,459)

Profit after tax (norm)

32,110

28,890

72,887

87,511

85,247

68,084

101,825

114,913

Profit after tax (FRS 3)

15,589

39,486

44,293

74,692

74,952

60,737

89,497

108,291

Average number of shares outstanding (m)

1,809.7

1,928.3

1,928.3

1,928.3

1,926.1

1,916.5

1,916.5

1,916.5

EPS - normalised (c)

 

 

1.31

1.64

3.78

4.54

4.44

3.54

5.31

6.00

EPS - FRS 3 (c)

 

 

0.87

2.05

2.30

3.87

3.90

3.19

4.67

5.65

Dividend per share (c)

0.00

0.15

0.84

1.27

1.04

0.96

0.96

0.96

Gross margin (%)

26.5

30.1

42.2

43.4

39.8

38.2

46.1

47.6

EBITDA margin (%)

26.1

29.9

42.0

42.5

39.3

37.9

45.3

46.6

Operating margin (before GW and except.) (%)

21.6

22.5

34.2

33.8

32.3

31.5

38.1

38.7

BALANCE SHEET

Fixed assets

 

 

315,279

361,529

314,968

398,533

401,139

439,676

562,677

556,237

Intangible assets

56,899

49,372

43,466

50,548

44,210

44,429

46,614

48,807

Tangible assets

254,247

305,355

270,286

346,922

355,802

395,247

516,063

507,430

Investments

4,134

6,802

1,216

1,064

1,127

0

0

0

Current assets

 

 

29,009

31,601

53,648

84,558

55,953

61,263

40,186

116,569

Stocks

4,310

6,323

7,626

11,356

9,977

9,567

12,255

13,565

Debtors

22,577

18,048

11,245

37,211

17,546

15,182

26,188

28,989

Cash

922

5,341

33,530

35,133

26,993

34,771

0

72,272

Current liabilities

 

 

(44,395)

(63,855)

(78,722)

(105,978)

(58,989)

(77,386)

(118,307)

(104,480)

Creditors

(37,968)

(39,707)

(62,806)

(75,303)

(57,117)

(65,884)

(74,233)

(97,348)

Short-term borrowings

(6,426)

(24,148)

(15,916)

(30,675)

(1,872)

(11,502)

(44,074)

(7,132)

Long-term liabilities

 

 

(152,906)

(145,693)

(106,276)

(93,482)

(103,494)

(128,957)

(118,886)

(112,790)

Long-term borrowings

(112,827)

(109,618)

(73,333)

(28,011)

(37,088)

(45,334)

(34,648)

(27,527)

Other long-term liabilities

(40,078)

(36,076)

(32,943)

(65,471)

(66,406)

(83,623)

(84,238)

(85,264)

Net assets

 

 

146,988

183,582

183,620

283,632

294,609

294,596

365,669

455,536

CASH FLOW

Operating cash flow

 

 

5,345

59,822

73,399

124,549

142,879

132,941

117,833

174,860

Net Interest

(6,076)

(14,685)

(10,834)

(5,623)

(2,794)

(5,121)

(4,557)

(7,085)

Tax

(1,634)

(4,497)

(5,804)

(18,902)

(8,520)

(7,722)

(9,885)

(14,346)

Capex

(127,279)

(52,261)

(30,849)

(44,151)

(81,951)

(109,952)

(149,534)

(25,790)

Acquisitions/disposals

6,319

466

207

3

563

(2,779)

0

0

Financing

11,944

(0)

0

0

(3,222)

0

0

0

Dividends

(11,030)

(2,933)

(2,933)

(17,782)

(21,559)

(19,975)

(21,200)

(18,424)

Net cash flow

(122,411)

(14,088)

23,186

38,095

25,396

(12,608)

(67,343)

109,215

Opening net debt/(cash)

 

 

3,138

118,332

128,424

55,719

23,553

11,967

22,065

78,722

Exchange rate movements

(619)

537

1,663

7,979

(4,401)

(4,481)

0

0

Other

7,836

3,459

47,856

(13,907)

(9,409)

6,991

10,686

7,121

Closing net debt/(cash)

 

 

118,332

128,424

55,719

23,553

11,967

22,065

78,722

(37,614)

Source: Company sources, Edison Investment Research


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Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

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Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

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United States

The Investment Research is a publication distributed in the United States by Edison Investment Research, Inc. Edison Investment Research, Inc. is registered as an investment adviser with the Securities and Exchange Commission. Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

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London, WC1R 4PS

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London │ New York │ Frankfurt

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London, WC1R 4PS

United Kingdom

General disclaimer and copyright

This report has been commissioned by Pan African Resources and prepared and issued by Edison, in consideration of a fee payable by Pan African Resources. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

The Investment Research is a publication distributed in the United States by Edison Investment Research, Inc. Edison Investment Research, Inc. is registered as an investment adviser with the Securities and Exchange Commission. Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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