The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
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‘This time next year Rodney, we’ll be millionaires’
Elikhulu will be incurring development capex right up until completion of commissioning i.e this month. However any revenue less costs related to production between first pour and commissioning will be deducted from the capital costs.
Loots said the Sheba update will be in Feb I believe.
Do we think the results to 30th June included the full costs of Elikhulu?
Any further costs in July prior to commissioning in August?
The Baberton rebels have also got their pay rise so hopefully will keep their heads down now.
Some people looked at the snapshot cash position as at 30-06-2018, but ignored:
The available Revolving credit facility of R485 million = approx. GBP 24.9 million.
The investment of "..Pan African Resources holds 13,064,381 shares in MC Mining Limited (previously known as Coal of Africa Limited). The investment was fair valued at R56.7 million or GBP3.1 million...."
That every week they can push a hypothetical wheelbarrow down to the bank and tip 2 to 3 thousand oz of gold onto the counter top, and ask the teller to credit the USD or Rand equivalent amount to PAF's bank account.
I don't think that cash, cash-flow or access to borrowing is a problem.
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If there is a good business case for starting a project
The Royal Sheba Project
Evander Mines’ 8 Shaft pillar project
Evander Mines’ Egoli Project
Barberton Mines’ sub-vertical shaft
or a purchasing a new asset (even if that involves borrowing) you can see why they would want to press on.
But there will I hope be a few months gap until a decision is made on whether to proceed on something new. In that time people can see how well the low cost production model works.
Eish my sentiments exactly. A lot of the negativity stems from broken promises and investors buying shares at 20p+ and being burned by a 70% share price decline. Its understandable, but emotion can cloud one's judgement if you let it
I cannot really comprehend the negativity towards PAF, who have just released a rather pleasing RNS. On a quick read, it was only the climb down to not pay a dividend that caught my eye. OK, the cash situation at the moment does not look good but, then there are so many other positive things! I cannot believe that no institution will advance/loan PAF cash to see it through? I have faith that the worse is past and we have excellent prospects going forward and just sorry I don't have some cash available to jump in! PAF could easily be well above 10 pence if there is a change in sentiment towards PM's! Jurisdiction is a bit of a problem but then it is Africa and one needs a higher risk tolerance for investing there anyway! Present government is hamstrung sorting corruption etc... a jolly good thing!
Agreed, the results confirm the suspicion that the sale of Phoenix to SLP was a 'distressed sale'.
(disclaimer) I hold SLP shares and know how beneficial that acquisition will be to fellow shareholders but I can't help but wonder who in their right mind is buying into this company at current levels given the company have narrowly avoided disaster. £700k cash leftover and this is worth £150m? GL all
Nice to see the share price rise but the debt position is rather alarming considering cash holdings are down to a paltry £700k. That is a high risk position from a liquidity management perspective especially for an Africa based miner. I worry that the company doesn't have the financial buffer to cope with any unexpected bad news. Is £700k even enough for working capital? Certainly no emergency buffer/cushion. Just hope the worst is well and truly over and the cash pile can start growing. I sincerely hope they don't rush into any new projects which will require large capex upfront such as royal sheba. Yes it's nice to have licences and potential opportunities but if you don't have any money to pursue then forget it for now at least! Time for the company to build a base again and get under a firm footing before going after new projects. GLA
The results always were going to be a bit of a car crash, but at least all the bad stuff was forewarned, and theres plenty to look forward too, This financial year is the one they need to start delivering on. I my opinion, to attempt to pay any level of divi would have been foolhardy with the current levels of debt.
It does seem that the pieces are coming together to form a more robust, low cost gold miner and I will certainly be keeping my shares with a view to them reinstating the divi next year, and hopefully a share price above 10p.