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That was a really impressive H1 operational performance from Pan African with Gold production 98koz vs 92koz and AISC below guidance at $1300.
On track with the MTR Project and commissioning of Barberton’s solar PV plant.
Gold over $2,000 and with a low AISC we should be over 20p here.
Profit for the period = 98458oz x $660 (GP - AISC) = $65m approx.
Another 6 months like this then we're heading for PAF's best year.
Pre=tax Profit of $130m, current market cap of $380m (approx)...
That's a PE of lest than 3 !!!
Come on, surely a re-rate to the mid 20's, and that's before the Mintails gold starts to roll in.
IMO If it happens, it will happen suddenly and quickly, as these types of moves most often do.
Plenty to look out for in the future. Wont expand much on todays rns but I am ok to hold shares here. Gla
Amazing considering all the problems.
Such a pity.
Thus should be trading ar double the current share price but London has become a manipulators dream. So sad the FCA choose to ignore all the data and reports.
The lack of director buys is also disappointing.
Day traders toying with this.
Up all day, then last half hour sell and it ends red.
Just hope these people get caught out.
You have to be in it to win it.
Just had a nice jump north from being in the Red.
Don’t get this price action, below 16p is a true steal esp with results near the corner.
Agree ZAR/USD ratio correlation to PAF sp, possibly is not the main driving factor. If anything in order of importance there is POG, Production (whereas Production affect the sp more directly) then there is USD/GBP with the exponential of POG, which some time is not correlated to USD Index, all in the context of PAF sp been quoted in GBP.
But given the spread of PAF sp not sure if these data are worth following.
I got in recently a bit too hot on my entrance price. Planning to average down if/when the time is right.
Stage 2 is nothing mate.
It's stage 5 and 6 that causes most disruption.
Thanks, Gavster! Frustrating that SA government could not resolve energy crisis. Private energy sources are always more expensive.
Bit of a drop today. Probably this :
https://www.heraldlive.co.za/news/2024-01-03-eskom-hit-by-severe-plant-breakdowns/
IMO this will be more than compensated for in the upcoming trading update.
Hi Selpec
I've looked at that for a years, and occasionally there is correlation, then the SP moves and there is none.
I've looked at both GBP and USD relative to ZAR, gold price in ZAR, GBP, US$ and it's the same. Basically I came to the conclusion that the market is just fickle, it's pretty much the US$ gold price that has the most effect, even when it moves up and the GBP/ZAR exchanges show no real benefit to PAF.
The main drivers are the basics IMO, gold price, production and earnings.
Production has been very much affected by the power problems
Right now, we're heading back up to 2022 production levels which is amazing considering load shedding.
Eskom problems are back again already after their holiday, as said below, the whole country is moving towards private power and renewables fast, if it's household panels or wind/solar farms or that massive power station ship.
Struggling to find correlation between ZAR/USD and PAF price. I suggest lower rate should be beneficial for PAF. Can anybody confirm it?
Regarding frequency of dividend payment. Hethen Hira promised to bring this to the executive committee during first meeting in January. Considering balance sheet strengthens there is high chance for that to be revised.
Hi mcssupt
Ahh OK, around $70m. They'll get that paid pretty quickly, that will not, and has not smacked the SP to the low levels Elikhulu did. Loot's idea to keep up dividends is a good one. TBH, at that level they could both increase Divs and pay the debt down. I know they're looking into wind farming, Striking a deal with a wind farm power company would be better than owning it perhaps, as without battery storage, power at night can't be obtained with solar, which is when most of the load shedding has been. Anyway..., I don't see this kind of debt level any sort of problem.
Gavster, there is debt.
Mintails feasibility study estimated construction capex at ZAR 2.5 billion. In December 2022 PAF issued two bonds for ZAR 800 million, scheduled to expire EOY 2025 and 20127. In March they received an up front premium of ZAR 400 million to sell 4846 oz/month gold @ fixed price of just ZAR 1.025m/Kg. The balance of the construction costs will come out of their ZAR 1.3 billion credit term sheet with RMB - it's the reduction of this ZAR 1.3 billion balance that PAF would make best use of their increased POG profitability.
Mulder, here not everybody interested in high price. At least in short terms. The lower the price - the more shares can be added. I planned to add at 16.5 today. Considering gold drifting down second day, behavior of PAF price was quite predictable. See my post on 27 Dec 2023 18:41.
Do shareholders here not care they are being cheated day after day with a lower share price than it should be?
The close today should have been 17.5p
LSE close 16.8p
WTF? Who has contacted Hethen about this +/- FCA market abuse teams?
Almost a 5% difference.
I also prefer dividends. But at least 2 times a year. Better quarterly. I will ask Hethen Hira to include this question to next AGM. Otherwise 15% SP drop on ex-divi day.
20p soon imo. Seems to be happy above 17p now and the chart is a thing of beauty trading between two ascending tramlines.
Results in January should be the catalyst to establish a new high imo assisted by POG tailwinds.
Usual caveats
Trek
There is no debt except for Mintails and that's been ring-fenced to be paid from Mintails earnings. That was my understanding of the company's reasoning when funding Mintails, because Loots wanted to avoid the SP crashing to 7p like last time. IMO There may be objections to a detailed buyback. The shareholders have made it clear there should be no issuing of shares, but only 7% against buying back shares. That said I'm not sure the UK shareholders are significant enough to influence a decision. I favour dividends, been waiting 10 years for it to get to a proper amount. With a 2p divi for example, the share price would be driven much much higher (to the 30s at least) which would more than compensate for any kind of 20% WHT whilst keeping the divi down to one cent.
I would prefer PAF to accelerate repayment of debt with their POG increased profitability and so further improve bottom line earnings. Also thereafter to initiate stock buy backs, also to improve EPS. Both of which help SP. Reasons being I would rather pay just the 20% capital gains tax on share price gains than on dividend tax which then comes on top of 20% South African withholding tax (I have had no success reclaiming and reducing this to 10%. I did download Selpec's DTA form (thank you) but don't understand how this facilitates my reclaim when my online brokers say they cannot help).
In the past the PAF SP has been notoriously slow to react to the market, even when the speculation is positive (as is currently with the POG) or negative (as in last year when we all felt load-shedding was a problem but the SP was only partially doing what would be expected), until results or a the company releases the news, when the SP react's sharply.
This could be the case now, with a sharp jump coming in Jan/Feb.
The next update is expected in a few weeks where we'll get a feel of revenue/income for July-Dec.
Average gold price I estimate as 1960 for Jul 1st to end of Dec (that's me visually checking the chart and this figure is easily up for discussion).
So Revenue estimate would be 1960 x 96,000 (from their recent RNS) = $188m. Very good !
Using Mulder's AISC estimate of 1325 that's just over $60m profit. Which is well on track to equal and surpass the 2022/2021 figures, and bearing in mind Mintails is on the way and back in 2022/2021 PAF still had a mountain of debt, then surely next year could be the time the dividend gets over a cent, how about two cents per share...
Add in an extra 10,000 ounces a year for mining on fully power from 2024 to 2025, how about they simply pay that to us as another cent per share dividend. Next AGM, maybe it's time to raise the question of whether PAF should pay dividends twice a year..
Cheers and Happy New Year !
@mcssupt Thanks for sharing that article. You can see power privatisation clearly happening just from what PAF are doing themselves solar-wise and that vast Turkish company power ship.
PAF hardly changed price since 14th December when gold traded at 1980$/oz. Seems algos programmed to drop the SP but cannot due to rising gold. If it's true, tomorrow gold sliding from 2080 down to 2060 will drop PAF by 3-4%.