Pan African Resources (PAF) 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).
We have recently increased our core valuation of PAF to 48.08 US cents per share, based on projects either already in production or sanctioned. However, this rises by 46–57% once other assets (eg Egoli) are also taken into account. In the meantime, PAF remains cheaper than its peers on at least 66% of commonly used valuation measures and has the 18th highest dividend yield in the precious metals mining sector, globally.
Metals & Mining |
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Cobus Loots
CEO
Deon Louw
FD
Keith Cousens Spencer
Chairman
Forecast net debt (US$m)
93.8
Forecast gearing ratio (%)
26
% | 1M | 3M | 12M |
---|---|---|---|
Actual | 5.6 | 26.7 | 104.9 |
Relative | 7.0 | 22.3 | 85.1 |
52 week high/low | 27.6p/12.1p |
After exceeding our forecasts in FY23, Pan African’s (PAF’s) interim adjusted EBITDA achieved a record of ZAR1,513m in H124 – 20% above the previous record. Since then, production guidance for FY24 has been increased to 186-190koz (cf 180–190koz previously) at an unchanged all-in sustaining cost of US$1,325-1,350/oz and it has concluded a five-year wage agreement at Barberton. As a result, we have increased our normalised EPS estimate for the year by 19%. Within the next two years, however, we expect output to exceed 250koz pa and normalised EPS to exceed 6c/share.
Y/E Jun | Revenue (US$m) | EBITDA (US$m) | PBT (US$m) | EPS (c) | P/E (x) | P/CF (x) |
---|---|---|---|---|---|---|
2022A | 376.4 | 147.8 | 117.2 | 4.44 | 7.7 | 4.6 |
2023A | 321.6 | 121.9 | 92.9 | 3.54 | 9.7 | 4.9 |
2024E | 390.3 | 177.6 | 141.7 | 5.73 | 6.0 | 6.0 |
2025E | 420.8 | 206.6 | 162.4 | 6.28 | 5.5 | 3.5 |