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Yes, your long communication shows insight in so many aspects concerning PAF.
It's a Great Play on Gold and hope these PAF guys keep focused and don't start buying up mines in SA. Mind you, if a gold mine cannot survive in this gold frenzy, there is a serious problem, LOL!
I always remember how the Old Gold Masters made their Millions during the 1980's, when there was civil war in the old Lesley, Kingross and Winkelhaak mines! Leverage etc...
Following gold higher
Here is a take. If Cobus thought there were major problems with nationalising coming then he would not be frantically paying off debt. IMO he would be more 'short-term-ist'. and still pay the debt, but at a less rate and boost the SP through bigger dividends. Loose expectancy pledges of a 4p / 5p divi for example would bring the herd alright.
Been looking at this one for weeks, but South Africa made me way - but price keeps inreasing nicely!
Morning Eish,
As so often in these things, getting a company's value properly recognised by the market has so much to do with effective communication - something the executive management of many listed companies seem not to be particularly good at, even though they seem operationally very good. It seems to me that Pan African is not especially bad at communications but could certainly do with some improvement, especially re the London market which is so much more sophisticated and savvy than the lazy boneheads on the JSE.
One real message PAF needs to communicate to the market is that it is largely independent of the strange dynamics of the current SA situation (rudderless government, economy in a largely self-inflicted mess, militant unions, electrical power instability, etc - all, of course, as you said, entirely the fault of colonialism and Rhodes....).
The reality is that for a small low cost operator like PAF with Dollar revenues and a low and manageable SA cost base, it is a great story - it must just be enthusiastically de-coupled in an investor's mind from the shenanigans plaguing the country (because they actually have minimal impact on a company such as PAF).
That requires some really decent IR - but as soon as investors realise that PAF is a pure leveraged play on the gold price, its location in SA becomes largely irrelevant (and, short of land expropriation which, despite enthusiastic yelling from the peanut gallery, does not seem imminent, is irrelevant.
Sefton82, the big boys are long gone to St Elsewhere! LOL!
We're OK here for a while, no mass starvation yet but, it's coming!
Of course it's all the fault of you evil British Colonials, hey! And Apartheid!
Morning All,
I am new to this bulletin board and just loaded up on some Pan African stock.
I am generally bullish (quite strongly so) on the gold price because of the global political and economic uncertainty, which shows precious few signs of stabilising (no matter who wins the US election, the situation there will be confused and uncertain for some time - and actually catastrophic if Biden gets in).
But the gold price itself moves on a 1:1 basis whereas it seems to me the lowest cost producers' value increases on a non-linear basis - ie, if the gold price goes up 5%, the value of the lowest cost producers could (should?) go up a multiple of that move - say, 20%.
I actually see the political and economic risk in South Africa as weighing very much in favour of smaller, specialised producers such as Pan African. The majors mining deep are much more exposed to the cost (and availability) of electricity and are much more vulnerable to the unions .
So, if there were to be further problems with electricity and further instability in the country (which seems likely), the big boys will be most affected (much higher cost base, much greater vulnerability to strikes/shutdowns, etc) and would then potentially be taking production capacity off the market at a time when the gold price is rising.
Which should further accelerate the rise in the gold price and thus, exponentially, the value of the lowest cost-producers.
But, as we have seen with the money supply in the US and UK, some of the old certainties of economics seem to have been suspended, at least temporarily. And the relationship between supply and demand might now be dancing to a new tune.
But I think not and think Pan African looks a really good call and look forward to seeing whether I am right.