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Started: Gavster-NBC, 20 Jun 2024 14:00
Last post: Selpec, Today 08:56
Which hedges available for PAF?
Hi again Gavster & thanks for replying
The $42.5m is in their statutory accounts & the costs as shown in statutory accounts differ from AISC because of the way the costs are presented to conform with IFRS requirements. Normally they won’t differ dramatically but can do e.g. If a company puts through some exceptional write off or gain in their statutory accounts.
For PAF in H1 the revenue of $194m in the statutory accounts is the 98k oz @ $1960 per oz
The statutory costs are Costs of Production of $121m plus Other/Royalty of $10m. These total appx $1330 per oz v their stated AISC of $1328 (usually IMO they don’t align quite so closely!). There are net finance costs (which now should be reducing rapidly) of $5m resulting in a pretax profit of $59.5m. Tax is approx. $17m – in line with the SA corporate tax rate – and hence statutory net profit is $42.5m
As for the current half year, one thing that surprises me a little is that they continue to guide AISC in excess of $1300. I say this because (a) in a presentation earlier this year they indicated progress in their underground operations should improve AISC and (b) they have stated that they have cut high-cost production. Therefore, I am hopeful that AISC may actually come in at or below $1300. We’ll see soon enough.
On a separate Off Topic, over at BGLF I agree with your post of 5th June. I think Damofarl's reply is a bit off track in making reference to a mix of NAV numbers and Market SP numbers. I’ll follow up over there – But not until after the weekend as we make the most of the weather!!
ATB
Hi jjhbev
Good point, and yes, I think you're right.
Looking back at the trading statement from Feb RNS's.
H1 : Gold produced and sold 98458 at price of $1961 = revenue of $193m, so if profit was $42.4m shows costs of ((193m-42.4m) / 98458) = $1529 against their quoted AISC of $1287. Not sure what the taxes are, or whether the dividend was seen as a cost of 18.3m, which would still make cost per ounce of $1347, so looks like it must be after tax (15% ?).
Either way, we're heading for a bumper H2, Profits of $100m or more IMO, so a 40% payout means surely means at least 2 cents, which I think was my guestimate dividend already.
Good morning Gavster,
A question on your numbers for the year. For Q3 & Q4 are your numbers pre tax? (my reading of your post is that they are, whereas the $42.5m for the first half is after tax).
Assuming your figures are pre-tax then the after tax figure for H2 may be in the range of say $55m as compared with the $42.5m for H1. To me, this seems realistic as the results for H2 do "benefit" from the uplift in the gold price (particularly Q4) but production for H2 will be some 8 thousand oz less than H1.
A net profit for the year around $95-$100m could IMO give rise to a div in the range of 2p (pre the impact of the wretched SA witholding tax).
Apologies if I have misinterpreted anything.
ATB
This is probably one of the best stocks to be in right now, a rerate to. 40s, high dividends, plus Mintals coming online…
Bought here in Jan at 15.8 , been trading on and off since 2015, been a very good share for me. This time I can see it climbing into the 40’s so hanging on rather than take the profit.
Started: Mulder, 20 Jun 2024 21:07
Last post: Mulder, 20 Jun 2024 21:07
& forward P/E still only 5.
Started: Mulder, 13 Jun 2024 19:07
Last post: sterling, 20 Jun 2024 13:49
Good to be well above 26p again, its a start
Election uncertainty out of the way this should finally get past 30p and on to 40.
I wonder why AGM on 10th June did not move the SP? Nether up nor down. Will be surprised if formation of coalition has more effect than AGM.
Bullish.
Started: Gavster-NBC, 6 Jun 2024 16:17
Last post: Selpec, 13 Jun 2024 18:32
Gavster, it’s quite normal behaviour of parties trading out as much as possible from the situation. Unity agreement will be signed exactly on the deadline, - from memory on 14th day. However I think it will have the same effect on PAF price as improvement with Eskom. Nobody noticed lack of load shedding in H1. Seems investors read only financial report which needs update.
Looks like the uncertainty is going regards the government.
Can we also say all will be well and just carry on with respect to mining in SA. ..
https://apnews.com/article/south-africa-elections-lawmakers-parliament-negotiations-3fc23d8f18cbd62be982d1076c7e2e46
Hello Gavster,
The only thing that appears definite is that parliament has to be convened within 14 days of the election result being formally announced (next Monday I think?).
The process and some comment is given here
https://www.dailymaverick.co.za/opinionista/2024-05-26-what-happens-if-a-government-cant-be-formed-after-sas-may-29-election/
There is also an opinion piece in today's FT but imo this doesn't shed much further light on the situation
https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.ft.com/content/af4cd921-7c55-4458-926c-0293712e17f7&ved=2ahUKEwjN5_iTltGGAxWPTEEAHSaFBMAQ0PADKAB6BAgeEAE&usg=AOvVaw1I-Olzm4XOXArxu9wy5P2x
Yes, non-farm payrolls was in the afternoon. I noticed the China news knocked $25 almost immediately in the morning.
Besides China, there was also the US "non-farm payrolls expanded by 272,000 on its first estimate for May – over 55% stronger than consensus forecasts" which leads to a lower chance of the Fed lowering interest rates as many had hoped.
Started: Patryk221, 27 May 2024 16:59
Last post: Gavster-NBC, 4 Jun 2024 18:08
General Meeting
https://www.lse.co.uk/rns/PAF/proposed-capital-reduction-and-notice-of-general-meeting-jq0x1ecelixxzic.html
Notice is hereby given that a General Meeting of Shareholders (General Meeting) will be held at the offices of Fladgate LLP, 16 Great Queen Street, London WC2B 5DG on Monday, 10 June 2024 at 10:00 (all references to time in this notice is United Kingdom time, unless otherwise stated).
News, progress or any kind of Q&A with the directors.
Hi Selpec, please remind me what's on 10th June please (your comment - waiting for 10th June or significant increase in price of gold). Cheers
It's a bad couple of days for PM miners, but even with the real problems of South Africa having effect on us, FRES is down by nearly 7% today compared to PAF.
So.. Chartwise the problem is PAF has broken lower than the trend, but a floor should be the 200 day moving average, which is at around 23.3. Which doesn't exactly represent much downside. Especially when we have a slow rise to the production uptick later this year.
Any Q & A for Loots at this extra AGM ?
Hi RayCr
Thanks for that, as a far off onlooker invested in the UK, it's difficult to know how the various parties are perceived business-wise. IMO though, it would be better for the corruption index that more people are involved in governing.
There's also the view that "All roads lead to Rome" in the sense that when load shedding gets under control, the economy will improve no matter who's governing.
Would this news cast more sentiment on our SP that the politics ?
https://dailyinvestor.com/energy/52690/load-shedding-will-be-back-soon/
Energy experts have warned that load-shedding will return in the coming week as demand ramps up due to colder weather. Eskom has promised to limit power cuts to stage 2 but has not ruled out the possibility of higher stages. Parts of South Africa are expected to be hit by a cold front starting Monday, with Gauteng set to be hit particularly hard.
Imo the uncertainty over the make up of the next SA government is currently casting a shadow. The inclusion of the DA in any coalition will probably act as fillip to PAF. Any government with EFF involvement will have the opposite effect.
Started: Selpec, 19 May 2024 08:17
Last post: Selpec, 26 May 2024 09:38
Hi Gavster, there was video last year when Cobus mentioned 30% dividend as optimum for business. Not sure about this year. I just considered pessimistic scenario. 40% eventually might be a booster for SP.
Progress at Edison should be converted to some figures,. I would expect higher PAF production rate without load shedding, - but no real change reported up to now. At least no official statement. We likely see it as surprise.
Hi Selpec
"Usually Cobus insists on 30% dividend, so expected dividend will 1.44 GBx this year"
He used to say 40%, was this a figure he stated or you worked out ?
Not a biggie, our notepad estimates are similar.
I'm very surprised the Edison figures haven't updated yet, since the directors have both now secured their holding.
Last figures were before the POG shot up, and things were "happy" then.
https://www.edisongroup.com/research/a-happy-valentine/33260/
Considering production 185kOz in 2024, POG= 2350$, AISC=1327$, Debt =$56M
In pessimistic scenario Earning should rise up to $107M, or EPS=4.8GBx
Usually Cobus insists on 30% dividend, so expected dividend will 1.44 GBx this year.
Applying PAF typical P/E ratio 6.2 the selling price will be in the range 29 - 30 GBx.
So in my analysis 12% rise from current price is guaranteed. Optimistic scenario gives SP = 51, but PAF has never developed in the most positive way. Average SP target might be around 40 this year.
Started: Patryk221, 24 May 2024 14:48
Last post: Gavster-NBC, 24 May 2024 16:31
'Definitely' an increase in Dividend, two cents IMO. Which must be legal by the announcement.
Results are a month Away! Record profit and potential increase in dividends.
Started: Mulder, 24 May 2024 14:38
Last post: Mulder, 24 May 2024 14:38
Just a technicality.
Last post: Gavster-NBC, 24 May 2024 14:31
Hi VHippo. Yes I understand that, but was it because they bodged the Elikulu share issue. The dates tie up.
The CFO and the team are in a spot of trouble
According to Edison Group this will be quickly rectified with a court sanctioned scheme at no material cost to shareholders or the company. Disaster averted.
@Gavster To expand on my earlier post, the Board have made distributions (dividends and sharebuybacks) to shareholders in the amount of $93m that are illegal. They got their accounting of their reserves wrong on the forex movements.
Where is Terry Wogan when you need him!
Last post: LuckyLuciano, 20 May 2024 17:56
I think we need above 27.10 day close.
All time highs have been broken here and on JSE.
Started: BlueDefender, 20 May 2024 14:31
Last post: BlueDefender, 20 May 2024 14:31
Sorry slightly off topic but just wanted to share the link below it’s a great insight into the markets.
Its on every day live at 2.00pm hosted by Gareth Solway at Verified Investing.
https://www.youtube.com/watch?v=vUNWcUMKB-Y
Totally brilliant chart analysis.
Enjoy
Started: Patryk221, 20 May 2024 12:57
Last post: Patryk221, 20 May 2024 12:57
V good presentation but I feel dividend question was not properly answered., seems that’s staying as is for now… else great future here and SP way too cheap!!! We will continue to head north from here for sure. All in sustaining costs $1000/oz soon @$2400+ and Mintals coming online what’s there not to like, market will have to rerate us one way or another. Paf is a keeper!!
Should get some new investment in.
He should have mentioned forward P/E of only 3!
Started: 42trader, 20 May 2024 10:52
Last post: 42trader, 20 May 2024 10:52
Very good interview. Well worth watching.
Last post: BlueDefender, 20 May 2024 06:40
Gold hits new all time high... GoGold!
30p will get taken out if we remain here , PAF must be making a fortune at these levels..
Gold @2440 30s here we come!!!
Will be a bumper day tomorrow, with precious metal prices bursting upwards
Started: Mulder, 14 May 2024 11:01
Last post: Jonnn, 17 May 2024 16:14
Not sure if i'm looking at this as essentially a share buy back, or an infinite money glitch.... Seems like theres more going on than meets the eye.
Say for example, those directors knew that they were just about to recieve an all cash buyout offer? How best to capitalise on that situation? How about a risk free way of acquiring a ton of shares? That loan would disappear when the shares are bought.
I kind of hope this doesn't get taken over, altho its been talked about in the past, and i'm sure it would be at a significant premium.
Maybe reading too much into it. Seems shady tho right? But in a good way for shareholders on the face of it.
Never seen this kind of thing with a company before, even amongst the wild west mining shares of AIM !
Yes BlueDefender as you say, they've loaned the money to their top directors to buy shares, putting up their own shares as security and the company taking the dividend as interest, which I estimate could equate to over 15% on the loaned part. How will this go down at the AGM ? What's to stop them doing this all the time with other directors.
Not sure about this as I much rather see them borrow the money from a bank on their earnings, but nevertheless it is a confident move on the prospective SP value for 2025 to 2026.
So correct me if I'm wrong.
They have taken out a loan from the company to purchase more shares in the company and put up collateral of other owned shares which they will receive no dividend on, presumably as a form of interest payment for the loan...
Have I got this right?
Even at this price.
Bodes well.
70-80p is fair value here.
Started: Selpec, 17 May 2024 16:12
Last post: Selpec, 17 May 2024 16:12
Market capitalization gets over £500M. Milestone!
Started: Patryk221, 17 May 2024 15:23
Last post: Patryk221, 17 May 2024 15:23
This should be way over 30!
Started: Patryk221, 15 May 2024 20:06
Last post: sterling, 17 May 2024 15:08
26 broken
Yes… but nothing goes up in a straight line
Seems 26 is unbreakable
Tomorrow we should break the 26 barrier! ;)
End of June we should be well beyond 30p mark, I’m surprised we are not there already….
Have to say POG strength is remarkable, consolidating above 2300 and today CPI "COULD" see new hights.....
And share price up 47% in 3 months. Has been a great investment
Gold in Pounds up 1.9% today, 3.4% in a week, 18% over 3 months. I worry that its just a dream, and will wake up.
Started: Troajan, 13 May 2024 10:17
Last post: Troajan, 13 May 2024 10:17
Started: Patryk221, 10 May 2024 16:11
Last post: Patryk221, 10 May 2024 16:11
Next stop 30s
Last post: LuckyLuciano, 10 May 2024 09:32
IMO $2200 POG for next year is conservative, looking at yesterday reaction of POG out of labour data from US.
Given the opportunity POG wants to go higher and hopefully by next year inflation will be lower, possibly, also helped by more geopolitical stability around the world and lower oil prices. Unless another war pops up somewhere else .....
Good Morning Gavster
Thank you for your analysis. Your figures make a lot of sense and, if anything, I hope that they tend toward the conservative (which is the way I tend to go when looking at things.)
The only thing that I would hope is that the costs assumption for next year is overly conservative. Given that the uplift in production comes from the Mintails operation with an AISC of less than $1000 I would hope that – even allowing for local inflation – the blended AISC would be no more than $1300 and hopefully less.
I also hope that next year will see the introduction of semi-annual dividends (which don’t make sense on a small dividend but do at the level that we should be seeing) and/or the introduction of a share buyback plan (given the painful impact on us poor foreigners of the dividend withholding tax).
ATB
Hi all. Results estimate Update. Only 6 weeks away until year end. Average Annual guidance (186k-190k) = 188k oz.
Q3 Jan to March, average POG = $2066, assume AISC $1350
Q4 April to June, average POG so far looks around $2310-ish, assume $2300 will be the average and AISC $1350
Q3 earnings estimate ( (Guidance of 188k for H2 - H1 production of 98.5k ) / 2 for the quarter = 44750oz ) x ( POG $2066 - AISC $1350 ) = $32m
Q4 earnings estimate ( (Guidance of 188k for H2 - H1 production of 98.5k ) / 2 for the quarter = 44750oz ) x ( POG $2300 - AISC $1350 ) = $42.5m
Add that to the $42.6m from H1 (Q1+Q2) makes total of $117.1m for the year.
IMO even being cautious means a dividend of around 2 cents or 1.6p in December. At a 6% yield would mean an SP of 26p/27p which is about right so far.
For 2024 to2025, Their estimate is 215k to 225k production, taking the average of that 220k and an AISC of $1400 and an average POG of $2200 all means potential earnings of $176m and a dividend of 3 to 4 cents, 2.8p.
With a yield of 6% that's an SP of 46p, and in 12 months from now, that's a 100% increase on investing today.
That's a nice reason to hold or trade to a good position IMO
Indeed.....trebling NPV from MTR Project , costs down POG up some $450/OZ WOW.
Same will be for total production of 190K this year, results will be fantastic, expecting increasing dividend ?!
Nice. Guidance maintained. This should firm up the SP. A post I did. Few weeks ago speculating annual results of 185k oz should be pretty on the money.
Started: Mulder, 9 May 2024 10:38
Last post: Mulder, 9 May 2024 10:38
80p is fair.