RE: Shorts are out!17 Oct 2025 08:43
I know this is an old Report from June this year but worth posting again anyway., .and we are over $1000 higher now than then so assuming real cash-flow growth of 3.6% per year the price has to be north of £2!!
Valuation: Steady with much potential upside
Our core valuation of Pan African has risen by 0.5% to 38.99c per share (cf 38.80c previously), based on its six producing mines. However, this uses a relatively conservative gold price ( US$2,124/oz nominal on average for the period FY26–30). It rises by a further 23.69–28.71c (17.42–21.12p) to 62.67–67.69c (46.09–49.79p) if other assets, such as Egoli and the Soweto Cluster, are included. It more than doubles, to 127.98c (94.13p), at the price of gold of US$3,300/oz at the time of writing. Alternatively, if PAF’s historical average price-to-normalised HEPS ratio of 8.2x for the FY10–24 is applied to our FY25 and FY26 forecasts, it implies values of 48.88p and 71.15p, respectively. In the meantime, it remains cheaper than its principal London- and South African-listed gold mining peers on at least 63% of commonly used valuation measures (Exhibit 11), which imply comparable valuations for PAF of 62.69p based on our year-one EPS estimate and 72.61p based on our year-two EPS estimate. This is validated by a valuation of 96.10p on a cash-flow and terminal multiple-type analysis (on an ex-real growth assumption), rising to 199.54p/share assuming real cash-flow growth of 3.6% per year (which is the average real return of the gold price from 1967 to 2024).
https://www.edisongroup.com/research/records-abound/BM-1843/
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