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There’s no doubt we’re stuck in a fast receding tide, taking down all gold shares. Who would’ve thought we would be here after touching nearly £1.80 not long ago?

Mike - what’s going through your mind about theshare price and the outlook ?

Of course they say the time to buy is when everybody else is selling. But I have an enough already.

All the gold miners took a pounding today

And there was me hoping we’d end the week on a bright note. This collapse has certainly comes as a surprise to me. The gold price down 5% in the week as added to the disappointing trading update. Will be below a pound soon. .

Thanks Mike

If I didn’t have so many shares already I’d probably buy some more.

But to be fair, if I’m honest, my optimism about the company has come down a few notches after the results and maybe that’s exactly how the market feels. Though I think the drop is over-done.

Your tandem point, Mike, is what makes me wonder. Was there an arbitrage here that someone has taken advantage of, for example?

Thanks, Mike. I wonder if somehow the fall in the PAF share price is linked to the transaction. Don’t know how, but it seems such a precipitous fall, and so sudden. Of course I know it coincides with the announcement, but I’m still left with a question mark.

Since the beginning of this week? I know they sold a short while ago. But who has been selling this week.

Then who has been selling?

Thanks Mike. I wrote to the company suggesting that they needed to provide better guidance about future production numbers and received an encouraging response. This was some months ago. I sense there is a bit more data in the latest report, but it is still quite a fight to work out the numbers. My belief in the company has substantially been around the strength of the management and I remain of that opinion. There’s a lot going on, for example with Australia, and what we’re really betting on is substantially increase production numbers in a few years time, good cost control and the gold price at least holding around its current level. There are quite a few ifs, but sand maybes there, which,, of course, will put a dampener on the share price. While I would hope we’ll see some improvement from the current share price, absent a jump in the gold Price, it’s hard to imagine any big rises in the short term, mainly because the outlook for 2027 is now less certain and more disappointing.

I agree with all you write here, Mike.

I confess to be very surprised at the plunge in the stock price yesterday. I had always thought there was a risk of a sharp fall, but I had seen this very much as associated with a decline in the gold price. Yesterday‘s decline seems to be due to disappointment with production numbers and increasing costs. I’m surprised so many shareholders figured that out and sold, though it may be that actually there weren’t too many sales but insufficient purchases.

It would be fascinating to know who sold. Could it be people who had to wait for the announcement?

There’s no doubt that the increasing costs and production disappointment has taken a lot of of the gloss of future profit projections. My figures were showing a very sharp jump in 27/26, whereas now it looks broadly flat. Your calculations are similar.

While my sense is that the shares are undervalued, I think it’ll be a long time before we see £2. And any fall in the gold price will put the stock under a lot more pressure.

That’s the risk.

Trying to understand AISC is not easy, especially when PAF is undertaking both new capital expenditure on new mines (not included in the figure) as well as refurbishment work on existing mines (cost included in AISC

For those that are interested, here is how ChatGPT explains AISC:

AISC (All-In Sustaining Cost) was developed by the World Gold Council to show the true ongoing cost of producing an ounce of gold. It starts with operating costs and then adds the expenditure needed to keep the business running at its current level.

* Depreciation is an accounting charge and is excluded.

* Actual sustaining capex spent during the period is included.

For example:

Suppose a mine buys a new haul truck for $10 million.

Accounting profit

The company may depreciate it over 10 years:

* Depreciation charge = $1 million per year

AISC

If the truck is classified as sustaining capital, the full $10 million affects AISC in the year it is spent.

Therefore AISC can be quite volatile from year to year if sustaining capital spending is lumpy.

⸻

The next wrinkle is extremely important when analysing miners:

Sustaining capex versus growth capex

Only sustaining capex goes into AISC.

Examples:

Included in AISC

* Replacing worn-out equipment

* Rebuilding tailings infrastructure

* Underground development needed to maintain current production

* Replacing processing plant components

Excluded from AISC

* Building a brand-new mine

* Expanding production capacity

* Major acquisitions

* New projects intended to increase future output

This distinction can be subjective.

A management team wanting to present a lower AISC may classify expenditure as “growth” rather than “sustaining”. Analysts therefore often scrutinise these classifications carefully.

Well, Mike, selling those shares at 1.20 a few months ago doesn’t look so stupid now😂. At least, you have the opportunity to buy back in at even less…..

Skim Reading through the figures, I think the issues are twofold:

1. ASCI next year (27) looks much higher than we were hoping - maybe $2175.

2. Production doesn’t increase as fast next year as we would’ve liked. Indeed, 27 production at around 300,000 ounces is only about 10% up on the forecast for 26. And that the 26 forecast has come in at the bottom end of the estimated range which management provided earlier this year hasn’t helped the sentiment.

Combining higher costs with low production in 27 suddenly means that the 27th profits could be similar to 26 - not great news for the share price.

One encouraging sign is production in the second half of 26 year is about 140,000 ounces, which means, with a step up in Tennant, 300,000 next year should be achievable.

I haven’t studied the figures in any more detail, but the company certainly seems to be providing fuller future production forecasts.

These are tough weeks for we fans of PAF. I was annoyed to seeing the chairman selling such a pile of shares. It doesn’t help market sentiment. Or indeed my sentiment.

But all the gold miners are down - we aren’t being singled out for special treatment. We’re still printing money at 4 1/2 thousand dollars to the ounce.

Au- gust

Definitely a positive omen☺️

I fear we’re going to be bouncing around for a while yet, but the fundamentals remain outstandingly good.

Well, I smiled at the end of last week so I should acknowledge that this one was a reversal.

Unless the gold price goes up, I suspect we’re going to be stuck in this sort of range for a while.

And of course, if the gold price goes down…..

I hope Viable is correct with his production estimate but my sense is with Mike. Which is why the SP growth over the next few years is more likely to be steady rather than spectacular, absent a further surge in the Au price.

If production can be quickly raised to Viable-like levels, then the SP would move upwards more quickly. And if the Au price were to rise as well.....then we would all be smiling.

I'm hoping the Co will provide better estimates of future production levels than has hitherto been the case. I've written requesting this - we can but hope. Clearer production forecasts will help the SP - assuming they are encouraging.

Onwards and upwards - albeit bumpily

Have a nice weekend investors!

Good point Viable. I missed that trick of a visit!

Thanks for the link.

Nice to see SP moving up again. But certain to be bumpy.

I’ve no idea where the SP will go on Monday, but I predict a bumpy ride…

….hold tight.

100% agree

Stick in the horse

Ignore the kicks and bucking