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Thanks Mike

I was guessing 325k oz for 27. Be interesting to see company forecasts in due course.

Assuming overheads increased by 10% and an AISC of $1800 per ounce, I get a post tax profit for 27 of just over 500 million. This assumes gold at $4100 for the whole year. Not a huge leap over 26, mainly because of a flat assumption on gold price and hefty cost inflation.

But more than enough to get the share price to £2+

Australia should dilute the AISC once it is up and running, but may have opposite effect in start-up phase?

Of course you only have to change these assumptions a bit and the answer changes substantially. Gold price being the biggest factor.

Cheers

Hi Mike,

My model,, based on 275,000 ounces of production and an average price of $4100 comes out with a slightly larger profit than you -post tax $445 million. So we are in exactly the same ballpark.

But then we differ slightly because on a PE of 10 I get a share price of £1.69. Using 2.029m shares and 1.3 exchange rate.

But whatever, with a fair wind and fingers crossed and all the usual caveats that we share, there is plenty of upside still in this stock. And if the gold price can hold at around current levels, 2027 will be even better🤞🏻🤞🏻🤞🏻

What do you think production could be in FY2027? I’ve been working on 325,000 but that is a real guess. And what about AISC?

My instinct is that if the gold price were to hold and if production were to remain level and if costs Were not to go up (all hypothetical, of course) then the price would settle not far from £2 pounds per share.

Cheers

If I was on the board of a listed company, I would avoid quarterly reporting like the plague. It is an administrative burden, encourages short-term ism, and can be confusing as often as it is illuminating, as short term bumps often appear in the road.

I agree that higher dividends or more meaningful share buybacks would be useful . But it's early days on that journey and I'm reasonably confident we can expect an improvement as the profits flow through.

Thank you Mike

I’ve taken a punt on a few

My second gold miner

🤞🏻🤞🏻🤞🏻

Good morning investors.

Has anyone ever had a look at Steppe Gold? STGO

Thoughts?

It’s time for a steady nerve. This stock has always been volatile and will continue to be so.

10%+ swings over short periods have been the norm – just look at the share price graph over the last few years. Expect them to continue. Volatility is baked in.

But the market will eventually catch up with the good news, that’s for sure. (usual caveats about gold price, unforeseen calamities et cetera et cetera)

The project announced yesterday is potentially fantastic, as Mike writes. Another winner which will underpin production growth. Even if production costs are over by 50% it’s still a wonderful prospect.

But in the mining game, the proof is always in the pudding.

A share holders, what we need to pray for is the gold price to hold up around $4000. As long as that happens, the profits will flow and, in due course, the share price will rise substantially.

I’m glad you’re back, Patryk. I enjoy your contributions.

Joining the FTSE 250 is fantastic news.

I suspect that’s what gave the stock such a lovely bump today as index tracking funds bought in.

And a closing price of over a pound.☺️☺️☺️☺️

Thank you, Mike. Very helpful analysis.

As we’ve been writing, PAF is bound to be volatile. We just need to maintain the courage of our conviction and analysis.

I was hoping the share price could stick at north of £1 but it was never likely to get much higher than that whilst the gold price keeps yo-yoing and until some solid figures are announced at the half year.

Patryk.

Boat definitely not missed

Reducing your exposure and taking profits 100% correct if that felt the right thing to do. If you want to come back in with far fewer shares, that’s also ok. And whether you buy at 88 or 93 will make no material difference in the long term. The gamble you would be taking is on whether the share prices rises. IF it rises, you’ll do well at 88 or 93. Both will seem cheap.

And if the price falls, what you paid will make little difference to your pain.

Hi Rookie.

What others have explained previously (you need to look quite a long way back in this chat) is that these big end-of-day transactions are a result of market makers balancing their books rather than single individual transactions / purchases. So don’t read too much into them.

Well done with your investment.

Hold tight.

The point I was trying to convey earlier in my longer post , but perhaps didn’t do very well, was that all the good stuff like production volume increases and diversification to Australia, aren’t really yet baked into the share price. The proof will be in the pudding next year. And as long as the gold price holds up somewhere around where it is at the moment, sooner or later a substantial re-rating should occur. At least, that’s my hypothesis.😂😂😂😂. But in the meantime, expect volatility and acknowledge potential disaster if the gold price were to plunge.

I agree, Mike. Very substantially due to the increase in gold price. Who knows the exact percentage, but it’s a big one.

The rise in the share price of this company has essentially been down to factors: the rise in the gold price and, secondly, the market giving credit for the good strategic and operational stuff that Management are doing (diversification, big production volume increases in pipeline, move to main market, et cetera). Of these two, it's the gold price that is the main driver and, of course, because of operational leverage, (small fluctuations in gold price equals big fluctuations in profit), this means the share price is very volatile.

There's lots of things we need to keep up fingers crossed for, but a steady gold price is by far the most important and unpredictable. There must be a huge temptation for the board to hedge a chunk of this year's production at the current Au price. I wonder if they will do it? 100% I would.

I'm very very confident that if the gold price holds at around the current level into the foreseeable future, the share price will rise substantially. But if gold were to come back sharply , then all bets would be off.

That's the principal gamble were all taking

That’s it in a nutshell, Tigger.

Basically, a company is only allowed to pay a dividend or buy its own shares if it has the reserves from which to do so.

Otherwise, the capital of the company is effectively being reduced by the handing back of money to the shareholders.

It’s legal for a company to make losses and accumulate these through poor trading ; it’s not legal to spend cash by giving money back to shareholders when there aren’t the reserves (accumulated profits) there with which to do so.

But PAF made a schoolboy error.

If I interpret the statement correctly, PAF simply failed to get a set of accounts to Companies’ House (the official repository of all company records) which demonstrated that it had reserves, before paying the dividend. The accounts Demonstrating that the reserves were sufficient arrived late – perhaps only a few days after the Dividend was paid.

This was an administrative error or a failure of the postal system.

If the accounts been filed, the problem would not have arisen.

It’s an embarrassing **** up and no more.

Hope this helps

Which should’ve been avoided

okay. now read it.

this is not a legal opinion – i’m a retired chartered accountant.

1. this problem is an administrative **** up

2. it should never have happened and the company secretary is ultimately to blame. peel hunt may also have their fingerprints over the mistake which is why they’ve sought an indemnity and been given one

3. the paperwork is wordy because it’s been drafted by lawyers – such documents are never easy to read

4. the steps outlined, including the court process, will fix the problem and i doubt very much that there is anything for us to worry about. the value of our shares and the numbers of them in issue are unaffected by this correction.

5. nevertheless, until the court hearing occurs, there will be a little bit of a cloud over the company.

6. if i was the chairman or the chief executive, i would be furious and heads would roll.

Thanks Waterloo

Hello all

Help please.

I cannot find the RNS re share premium which seems to have caused concern / confusion with some of you.

I've looked above (News/RNS), on Stockopedia and the company website, all to no avail

thanks

As I have written on quite a few occasions, this is not one for widows and orphans.

The prospects for this business remain excellent, even at a gold price of $3800.

The price rise in recent months has been driven by two factors – the move to the main market in London, but most significantly, the rise in the gold price. We all know that the price of gold mining stocks is much more volatile than the price of gold the metal. This is due to the operational leverage of the business with essentially fixed costs.

When the gold price went up, we soared. Now the share price is. coming back we come back just as fast, maybe faster due to nervousness.

What the market hasn’t yet properly understood, and won’t until the results come through, is just how profitable this business has become. That’s when long-term shareholders will get their reward. Obviously, the proof will be in the pudding and only then will we see whether Mike and I (in particular) are correct with our forecasts.🤞🏻🤞🏻🤞🏻

In the meantime, we need to hold our nerve.

And well done to those that decided to get out of a substantial profit. It’s just a different approach to investing.

The extinguishing of a share premium account makes zero difference to the share price. It is 100% just bookkeeping.