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Hi Gav,
Sorry I haven't replied before now. I am just an occasional contributor/voyeur on this BB nowadays.
I'm not disputing your gold production projections. I take those as a given as I have no reason to argue against them.
Your AISC of $1100/oz, or rather, Berenberg's AISC, may be too low. Without having access to the full report, no-one knows which of the three AISC/All-In costs referred to by PAF in its last year's full year report, this number equates to .
https://www.panafricanresources.com/wp-content/uploads/Pan-African-Resources-year-end-results-SENS-announcement-2021.pdf
PAF quotes three separate cost/oz figures: $1035, $1261 and $1401/oz. The last two include realised, and realised+unrealised hedging costs, respectively.
I am thinking that Berenberg are focussing on "Cash costs" in arriving at their $1100/oz cost assumption, since making forward looking hedging cost assumptions is a mug's game, but nevertheless they will occur, in a flat or rising POG environment. And every $ added on to All-In costs this way, will affect EBITDA.
In that same report, you will see that Attributable Earnings were 52% of Adjusted EBITDA, which is the nearest published number to what you are projecting. This 48% deduction from EBITDA should, I believe, be used in the next two
fiscal years in arriving at earnings after tax projections.
Finally, the 2021 dividend paid out was 37% of Attributable Earnings. No reason to take any different number looking forward.
So, before any hedging cost adjustments, I calculate that cash available for dividends will be your $175mn, X 0.52 = $91mn, X 0.37 = =$34mn or £28mn. On 1900mn shares, that's 1.5p/sh, rounding up. At 30p, that's a 5% dividend yield, before witholding taxes. At the current 19.5p, that's 7.7% gross yield.
Worth holding for. ATB.
Another buy rating issued today , just sold the trade n kept small profit in shares, at Whitby today n price of fish n chips in resturant crazy need to do a few more trades just to pay for chips
They can take all that from the remaining 60%... ;)
Older wiser, Please make the adjustments and post a different estimate, so we can see what you mean.
Just a minute, Gav.
I like your mining projections, but you really must take account of a) SG&SA expense, b) corporate tax, in arriving at an after-tax distributable earnings number off which to calculate a 40% divi distribution.
Anyway, the growth profile, and low(ish) AISC (compared with some others, like CEY) are what keep me holding here for capital stability + income.
Gav
Yep shares taking a beating today , the boys at the top its just a way to divert the money into their pockets n it will never change, back in late today again to trade ,you take care on the roof n if using ladders dont forget to tie em , me it was another leisure lazy day at alotment . Gla
Well done Roofer.. I've been outdoors doing DIY all day (actually doing the roof of my garden room) and come back in to find nearly everything has been pounded, including gold, and PAF !
Gold always feels so manipulated on days like this, it's as if the Americans are on a mission to keep gold down so that international gold investors never benefit.
Looks high enough now , sold Fri trade now , kept small profits in shares, waiting for next dip ........
Gla
Gav
Another great post with top info , back in again late afternoon to trade , have great weekend all......
Hi Roofer and all.
I think PAF once again is below the radar of value despite the market wide downturn.
The analysts at Berenberg expect :
"Production of 215,000 oz in FY 2022/23 and to 220,000 oz in FY 2023/24.
AISC of $1,100/oz and $1,085/oz, respectively."
Then add in 50k (for Mintails) in 2024 at a gold price of $1750 and average AISC $1100
we could expect profit of :
270,000 x $650 = $175m
40% of cash as dividend means $70m between 1900m Shares = 3.6c = 3p
Even at a modest yield of 10% means a future SP of 30p, AND... say at least 15% return (1p then 2p 2022/2023) on today's price in dividends until then.
A yield of 7.5% means an SP of 40p on 3p dividend.
Not exciting enough for the herd, but certainly good enough to be a decent percentage of my portfolio.
Cheers and GL.
https://www.sharecast.com/news/broker-recommendations-/broker-tips-national-grid-intertek-pan-african-resources--10098997.html
Gav
Great info, also broker upgrade from Berenberg to 33p, just sold a trade on news , kept profit in shares
Gla
https://thevault.exchange/?get_group_doc=293/1656570824-SENSPanAfricansuccessfullyconcludesMintailsMogaleGoldDFS30June2022.pdf
PDF Version from their own website.
This is showing on part of the PAF news feeds, all good !
https://uk.finance.yahoo.com/news/pan-african-resources-plc-successful-060000388.html
https://www.moneyweb.co.za/mny_sens/pan-african-resources-plc-pan-african-successfully-concludes-mintails-mogale-gold-definitive-feasibility-study-dfs/
"Activity Estimated date
Completion and finalisation of DFS Completed
Engineering optimisation activities June – August 2022
Detailed engineering study September 2022 – March 2023
Likely project commencement date September 2022
Funding package finalised October/November 2022
Environmental approvals March 2023
Construction commences April 2023
Commissioning July 2024 – December 2024"
Pan African is pleased to announce that the Company has successfully completed a DFS on the Mogale Gold Proprietary Limited (“Mogale Gold”) Tailings Storage Facilities (“TSFs”) that forms part of the Mintails Mining SA (Proprietary) Limited (“Mintails SA”) assets, situated near Krugersdorp to the west of Johannesburg, South Africa (the “Project”). The DFS was prepared by DRA Projects SA (Pty) Ltd (“DRA”), with reliance on specialist input from third parties for Mineral Resource and Mineral Reserve estimation, dump re-mining, tailings pumping and disposal and metallurgical test work. The parties have provided their consent for the release of the information contained in this announcement as far as it pertains to the results of the DFS.
HIGHLIGHTS FROM DFS
Significant production impact:
The Project has the potential to increase the Group’s gold production profile over the coming years, with re-mining of the Mogale Gold TSFs expected to add approximately 50koz/yr of production over its 13-year life of mine (LOM)
Equivalent to an increase >25% on Group’s current production
Compelling project economics:
Pre-tax NPV (at 9.5% real discount rate) of ZAR1,006 million (US$64,9 million), real ungeared IRR of 20.1% at US$1,750/oz and US$/ZAR:15.50.
Forecast AISC of ~US$914/oz and operating cost of ~ZAR78/t (~US$5/t at US$/ZAR:15.50) over the initial 13-year LOM
Construction capex:
~R2.5billion (US$161.3 million at US$/ZAR:15.50)
Payback:
Construction capital payback estimated within 3.5 years, post commissioning
Targeting production within 18-24 months from commencement of construction
Mineral reserve:
The Mogale Gold TSFs, which comprise various individual dams, contain a Probable Mineral Reserve of 123.6Mt of re-mineable material at a head grade of 0.29g/t for an estimated content of 1.14Moz gold
Further production upside:
Addition of Mintails SA’s Soweto Cluster resource has potential to extend LOM from 13 years to 21 years and further increase annual gold production
Proven technology:
Low unit cost hydro mining with low project execution risk at 800ktpm (thousand tons per month) carbon in leach (“CIL”) plant, similar to Pan African’s Elikhulu operation (currently processing ~1.2Mt per month)
Project funding: