Member Info for jjhbev

Good morning Mike

Jus a quick comment/question re your assumption for the production level for the 2026-2027 financial year.

For this financial year you have chosen the mid point of PAF's guidance for the year - i.e. 283k oz.

Given that H1 was "only" 128k oz, that implies approx. 155k oz for H2. The rationale for that level of performance has been given in the results presentation & webinar.

If production for the current half year does reach 155k oz, why would production for 2026-2027 not be of the order of 310k oz?

I acknowledge that company guidance is not (yet) at 300+ k oz but I cannot see why that figure should not be achieved if it already being achieved in the current half year. I believe (and hope!) that company guidance is now much more conservative following what was an over-promise/under-deliver performance at Evander 18+ months back.

Best wishes - and thanks for all your input.

Part 2

If I use my spreadsheet as per the previous post but with an assumed Basket Price of $2.8k (so, approx. 15% below the current level) I get a Net Profit per Quarter of $25m which equals $100m pa. On the same 7 times multiple this gives a value of £2 per share.

Do I assume that this will happen = No. But I always – as best I can - try to assume a wide range of potential outcomes and with Sylvania my view is that I feel that the current SP (nice as it is) is nowhere near fair value …. and if the stars align a SP of £2 is actually possible within 12 months.

By the way of an aside, I have modelled Pan African Resources over the past couple of years using a similar type of spreadsheet modelling and that has been a very nice investment over the past year… …but then, what hasn’t been in the precious metals sector!

Finally, I naturally hope that the Q2 report and figures are positive for the SP. But, if there has been a drop in production due to the rainfall in the quarter and therefore the figures are not as positive as hoped for and the SP dips I will not be too concerned. I am more interested in the production outlook plus any plans for expansion plus what should be a major uplift in dividends now and particularly in another six months.

Of course, the big question is the Basket Price. On that, my take is with that expressed by others. The Basket Price is now not dependent on the freak situation in the past where the Basket Price was totally impacted by the short-term spike in Rhodium. Now, there is a widespread commodity price uplift across very many sectors which shows no sign of going away.

Once again, some might say that this is a freak situation brought about by a Big Orange Freak. The thing is, that investors ranging from Central Banks and Sovereign Wealth Funds through to investors like us and on to outright speculators will not put our money into dollars (other than the AI sector which is a whole other story!) and so it’s very hard to see how the BOF can reverse the commodities story IMO.

Best Wishes

Hi Seisnav (and all)

This is a bit wordy – so I shall post as Part 1 and Part 2!

First of all, Thank you for your Basket Price charts and other input – much appreciated.

With Q2 about to be announced, I would very much appreciate your (and anyone else’s) thoughts on the following.

I also have run my own spreadsheet for some time, focusing on potential earnings per quarter and from that a theoretical value for Sylvania based on a 7 times P/E ratio. My model is based on the way that the company presents their figures in their quarterly reports.

i.e. I take an estimated basket price which is then applied to the 4E production to give a 4E revenue. I then put in a guesstimated By Products figure and Sales Adjustment figure and total these up to give the Net Revenue figure. I then add in the cost headings as per the Sylvania reports – with some increases to take account of inflation etc. and (I hope) to be conservative. I then get down to the EBITDA figure and – after an assumed tax cost – a Net Profit figure.

Something of note (that I haven’t quite fully got my head around) is that the figure for 4E Revenue

seems to be around only 72.5% of the figure one would get by taking the 4E production figure and multiplying it by the quoted Basket Price for the quarter. This is broadly how it has been over the past quarters & so that is what I have done.

Looking at Q2, I have assumed a 4E Basket Price of $2.2k. I have assumed 23k oz of 4E production plus 1k oz for Thaba (these may well prove to be optimistic). I have increased costs as compared with Q1 and I have included a $1m revenue figure for Chrome.

My EBITDA figure comes to just shy of $22m and the Net Profit is $17m. So, EBITDA very much lower than your figure.

If my Net Profit figure is annualised and the multiplied by 7 it gives a MCap of approx. $68m or approx £1.35 per share.

Part 2 to follow

Re MTR, based on what Cobus said during the presentation on Investormeet (see the answer to Question 8 in the Q&A) my take is that there will not be a new plant to handle Soweto but rather an expansion of the existing facility to take production up to 75koz pa. Hopefully this can be achieved quickly and at relatively modest cost (however, sadly more than $100k ;-) ).

Also, I feel that there will be an increase in the scale of the Nobles plant at Tennant beyond the enhancement to 1ktpd being worked on currently - which of itself should facilitate production of possibly 60koz pa. IMO it is well worth reading about the White Devil "Major Mine" propects on the Emmerson Resources site.

ATB

A few comments on the short-term outlook.

First of all, it’s very interesting to note that the Results Presentation shows that H2 production is guided at 145koz-155koz. So, from the start of calendar year 2026 PAF will be producing at approx. 300koz per year.

The Definitive Feasibility Study for MTR Soweto is due within the next 3 weeks and it is very hard not to see it firing the starting gun for development. IMO this should lead to Soweto being in production by the middle of 2027.

At Tennant debottling of the plant should increase capacity to 1000tons per day. However, I strongly recommend that investors read the Emmerson Resources site on the size of the White Devil site. IMO this supports the accelerated expansion of the Nobles plant and certainly underwrites a much longer period of gold production through Nobles.

A few comments on the short-term outlook.

First of all, it’s very interesting to note that the Results Presentation shows that H2 production is guided at 145koz-155koz. So, from the start of calendar year 2026 PAF will be producing at approx. 300koz per year.

The Definitive Feasibility Study for MTR Soweto is due within the next 3 weeks and it is very hard not to see it firing the starting gun for development. IMO this should lead to Soweto being in production by the middle of 2027.

At Tennant debottling of the plant should increase capacity to 1000tons per day. However, I strongly recommend that investors read the Emmerson Resources site on the size of the White Devil site. IMO this supports the accelerated expansion of the Nobles plant with higher production and certainly underwrites a much longer period of gold production through Nobles.

Hi again Viable

Following up on my post from yesterday, FYI I have initiated contact with PAF’s designated contact point in the UK.

The problem for virtually all us UK based investors is that we hold our shares in PAF via our brokers and to claim the reduction in Withholding Tax from 35% to 15% under the Double Taxation Agreement (DTA) one can only complete the South African reclaim paperwork if you directly hold the shares in your own name.

Thungela Resources (South African but also London listed) has put in place to get around this problem and the question is really whether PAF will do likewise. Do you have any personal contacts at PAF to put that to them? I am not sure that my interaction through the London end will get far enough up the line.

I have followed up my initial mail – which was answered promptly – with the following wording.

“As you note in your reply, shares held via brokers has meant that the DTA cannot be applied. Our holdings, like virtually all holdings by private investors, are held via brokers and we have therefore suffered the full 35% withholding tax in the past.

However, as per my mail, Thungela Resources (a South African company which, like Pan African, is listed in both Johannesburg and London) has put in place a procedure - via Compushare here in the UK - which does facilitate the reduction of the 35% Withholding to 15%. So, my question for Pan African is will they also put in place such a procedure. Could you kindly ask the appropriate people at Pan African (the CFO?) if they will do this?”

I will keep you/all updated

Best wishes

Good afternoon Viable,

Let me start by thanking you for your posts. The posts are very helpful/informative and you certainly seem to have good sources of information/contacts. That being the case, I wonder if you are able to provide any input/help in connection with SA tax on dividends.

With the potential for sizeable & growing future dividends being declared by PAF the issue of the 20% South African withholding tax becomes increasingly significant. For those investors not yet aware & reading this, the UK/SA tax treaty means that UK domiciled shareholders should either not be required to suffer the withholding deduction or should be able to reclaim it – however, the reclaim procedure is so convoluted as to make it extremely difficult to achieve.

As you may already know Viable, another South African company with a large UK investor base (Thungela Resources) has instituted arrangements for UK investors to be able to provide information through Compushare here in the UK to enable dividends to be paid to them without the imposition of SA withholding tax. The arrangement/procedure is laid out in this recent RNS from Thungela

interim-ordinary-cash-dividend-declaration-and-a-share-repurchase | Thungela

Do you know if PAF are considering such arrangements and/or is there any of your contacts who could raise it with the appropriate people at PAF? The potential impact for UK shareholders on an ongoing basis could be very significant indeed.

Best wishes

Hi

Have you seen interview on Mining Weekly?

Hi again alibaba

And thanks for replying.

I agree that there are plenty of assumptions in the (few) figures in the GSF RNS - But I am assuming (yet another assumption!) that GSF really are using the mid-point indications from third parties. I hope that they do achieve the operational and pricing numbers that go into their Revenue and EBITDA figures - but will wait to see... and I do respect that you are using a well researched/reasoned case for your figures.

In addition to my holding here I also hold a number of REITS - a mix of the Real Estate variety (including Assura & Care - and so it's been an interesting week!) and the Energy related. The latter include a small (almost speculative) holding in GRID. They also have released recent RNSs referring to better UK trading conditions.... So, fingers crossed and, with the best of wishes, I do hope that you are being too conservative!! ;-)

ATB

Hi alibaba

Thank you for having presented your numbers for expected revenue & EBITDA.

Revenue £55m

EBITDA £35m (based on costs of £20m & resulting in a margin of 64%)

In their RNS of 21st Jan 2025 GSF indicate – based on “the mid-case NAV revenue forecasts from several third-party providers” – the following figures for FY 25/26 (i.e April 25 through March 26)

Revenue £72m

EBITDA £49.7 (based on expected margin of 69%)

That’s quite a difference! Do you think that the GSF figures are wrong?

So, I’ve registered my “No” votes.

I remain angry about the way this offer was presented – particularly (now that the October dividend and Redemption uplift are stripped out) the Circular that has been issued in respect of the EGM specifically states that the offer is equal to only 75.5 €cents per remaining share.

So – not the discount to NAV of 9.9% as referred to in the offer RNS but 15.9%. IMO that’s an abysmal and unacceptable level of discount.

The timing involved adds further insult to injury. The EGM is scheduled for the 19th January and proceeds are expected to be distributed “on or around 4th February 2025”.

If you look back 12 months you will see in the RNS of 23rd January that there was a dividend declaration of 3 €cents with an ex-div date of 1st February and a payment date of 8th March.

Even if this year’s final dividend was only the 2.25 €cents that we have been receiving this year then, without this abysmal offer, we should be getting that dividend in early March – i.e. approx. 1 month after the offer proceeds will be paid. I regard the loss of this dividend as being equivalent to a further reduction in the value of the offer and so taking it down to around 73.25 €cents.

IMO the whole thing stinks!

I really do not like this offer… but I really really do not like the way it has been presented!!!

On that latter point I am quite angry at the reference to this offer being:-

a) Headlined as being 80.8 €Cents

b) This is “a premium of 7.8% to the closing price of €0.7500 as at 20th November 2024”

IMO this way of presentation, whilst factually correct, is designed to make the offer appear in the best possible light but it has – intentionally or otherwise – caused some investors to believe that they will receive 80.8 €cents for shares now being purchased (see Friday’s & this morning’s trades!).

THIS…IS…NOT…THE…CASE…!!!

First of all a small point. The offer states that there will be costs estimated of €.0064 per share to be deducted. Therefore the value of the offer – using their numbers – is actually 80.16 €cents per share.

However the main complaint I have is that this figure includes the October dividend of 2.25 €cents per share.

This dividend had an Ex-Div date of 31st October. Anyone who owned shares at that date gets that dividend (even if they have subsequently sold their shares). But anyone who has bought shares after that date (as I did – see my post of 8th Nov) ….WILL…NOT…GET…THAT….DIVIDEND!

Deducting that dividend means that anyone who bought shares since the ExDiv date will get 80.16 €cents less 2.25 €cents :- i.e. 77.91 €cents. People who paid more than this figure on Friday & today will actually lose money under this offer.

I think that the euphemism for this offer is “opportunistic”. Sadly, I expect that the offer will proceed (I will vote against but that will have no impact). Given this view, I have been selling ( at prices between 77 & 78 €cents on Friday … So, for the 78 sales I get more than the offer & I get it now!!). I will still have a substantial holding that will go through the offer. I will collect my dividend and redemption proceeds in any event plus the offer monies and I will make a nice profit – even though I would have preferred this to continue.

But I do feel angry about the way that some recent purchasers will make very little money or in fact no money at all!!!!

Ps If anyone thinks I have got my understanding/figures wrong please let me know.

Good morning manfor (& others from GABI)

I hold Volta (and have done for years), GABI and – most recently and at a much lower holding – FAIR.

IMO (and that’s all this is…an opinion) the share prices and discounts are driven by retail investors appetite for yield which is overriding any consideration of growth.

Starting with FAIR, as we know the yield is high at approx. 14.5%. As referred to by Damofarl in part 2 of his post, this level of payout has resulted in a smallish reduction in NAV. Going forward therefore there must be – or should be – a concern about the ability to sustain that payout level and certainly any growth seems hard to envisage.

Turning to Volta, there the position is one of both yield and growth. I recommend looking at the Volta monthly reports and also the July 2024 Annual Report. In the Annual Report I think that if you look only as far as page 3 you can get a clear view of the combination of yield and also NAV growth. I am referring to the Waterfall presentation on page 3.

You can see the following across both 2022-2023 and 2023- 2024.

Coupon & Dividend Income for both years was in excess of 20% of opening NAV (and according to the monthly reports this is continuing in 2024-2025)

That income is reduced by management & performance fees down to 17% in 2022-2023 and 19% in 2023-2034

Dividend payouts have increased but still represent approx. 8.5% of opening NAV

As a result, over the two years NAV per share has increased from €6.22 to €7.13 – i.e. 15%

Currently the dividend is €0.145 per quarter. I hope and expect that it will rise to at least €0.15 per quarter

So, particularly in 2023-2024, Volta has performed very well and could pay a dividend equal to or greater than FAIR. Clearly however, its policy is based on growth and not just yield. The current yield is 10.5%.

IMO, the Market (myself included) will accept a 10+% yield but – even with growth – will not pay the NAV value and get a yield of only 8% (which can be achieved/exceeded an Reits, PHNX, MNG etc etc etc).

I actually prefer Volta to FAIR (and, as with GABI & Reits feel greater comfort with an SP discount to NAV), but – at least in the short term – am happy to hold some FAIR.

This post has focused more on Volta than FAIR - and apologies for that - but I hope that you find it helpful.

No advice intended

ATB

Hi again Gavster/Damofarl

I also assume that we’re going to be looking at approx. 68m shares being redeemed – or, to put it another way, approx. 16% of shares. We have yet to see what the NAV figure to be used will be (& given market/interest rate movements through October I wouldn’t be surprised if it is slightly below 90€cents) but it will indeed be a very handy gain on yesterday’s SP of 70€cents/60p.

I was rather surprised that I was able to buy shares early this morning at the same price as yesterday. I trade via HL, Interactive & Barclays – but cannot trade this with Barclays which is very frustrating. It is also frustrating that with HL I have to trade the BGLP and with Interactive it’s the BGLF. In any event, I was able to buy some (for me) sizeable amounts early on at 60p & €0.7. It seems that those prices are now 62p &€0.73.

I actually think that those latter prices still represent good value given this redemption but I am now frankly overloaded here, in part because I think the return here looks so good as compared with the risk and in part because I expect to be getting 16% redeemed within a few weeks.

Going forward, I agree that the NAV per share and dividend per share should not be negatively impacted by this redemption (as per our discussions around the first redemption). The dividend may be impacted in due course by the amounts of non-earning cash that the fund holds prior to redemptions and/or the level of fund running costs on a reducing size of fund. Hopefully these will not lead to reduced dividends – or NAV – in the short term. I wonder whether we will get any commentary around this when the redemption is finalised?

ATB

Hi Damofarl/Gavster

Well.....that's a much larger redemption than I was expecting!!! (had thought half that figure at most)

Subject to share price movements, I will look at recycling at least some of the proceeds back into shares.

ATB

Hi Damofarl

I hope that you're well & that you are ready for Rachel !!!!

I'm just wondering if you saw the dividend declaration RNS of 21st October?

The dividend is 2.25€cents as expected. It's the wording at the foot of the RNS about a NAV based compulsory redemption being evaluated to take place prior to the end of Q4 2024. I hadn't expected anything extra this year & so regard this as very positive!

ATB

Good afternoon Damofarl

Thank you for your comments in your posting last week (absolutely no apologies needed but still much appreciated). Sorry I haven’t responded earlier but I have been entertaining relatives visiting from overseas and have only just seen both your post and the NAV update (given the amount I have invested here; this represents a woeful lack of attention !!).

As regards the redemption timeline/profile, I agree with your comments. In addition (whilst I would absolutely not claim to have any particular handle on much of the portfolio detail provided in the monthly and quarterly reports) there are a couple of charts which may give some indication of things.

One is the “BCF Look Through Summary” on Page 2 of the monthly report and specifically the graph of “Maturities”. This indicates little in the way of maturities through next year but then 83% over the next four years and fully out in 2031.

The other is in the Q1 2024 Investor Report. On Page 15 there is a chart headed “BGLF indicative forward-looking CLO portfolio cashflows”. To my eye this seems to indicate all such flows complete in 2030 with a much smoother profile (including something like 20% in year 2025 alone).

As I say, I do not know at all whether these are indications of the actual probable timelines for possible redemptions but I do agree with you that there is no indication whatsoever that the realization process will involve any firesales (although there may well be early opportunistic sales). In any event this does look somewhat of a no brainer from a risk reward perspective... but, as ever, everyone needs to DYO research.

ATB

So – before a further few comments from me on the NAV & Wind Down – I must acknowledge my “Homer Simpson” moment in my previous post. I stated that the redemption of 5.6% of shares using 5.6% of assets (in cash) reduced the assets and shares to 84.4% of the prior levels. Obviously that should read 94.4%....Doh!

Moving on!

I do hold with my view that the ongoing NAV per share has not altered as a result of the redemption. If I am correct then that will be seen in the monthly update due in about 3 weeks time. At the end of May the NAV was €0.9063 per share (down from the €0.9282 as at end April & used in the redemption as a result of the dividend of €0.0225). The NAV per share for end June should be €0.9063 +/- the movement for the month of June. If not, I am wrong.

Finally, one small (but significant) addition to the wording in the final paragraph of Gavster’s post:-

(This is from page 28 of the BGLF 2023 Annual Accounts under the heading of “Mechanics for Returning Cash to Shareholders”)

“Having consulted with the Portfolio Advisor, the Board anticipates that the redemption of the CLO investments held in BCF and BCM LLC will require a period of approximately 7 years. This is indicative only and it should not be construed as a guarantee of the Company’s actual liquidity profile”

Best wishes

Good Morning Damofarl

I have been looking through recent postings here and, looking at your dialogue with Gavster in early June, I am a bit confused by the numbers in your post of 6th June. I am referring to the sentence “they are returning 8.2% or €23m whilst cancelling 5.6% of the shares at a cost of approx. €16m”.

I believe that your numbers mix NAV values with Market share prices. However, my reading (and I guess Gavster’s) is that what we have had is a purely NAV based distribution and so that does not result in a change to the NAV per share.

This is my reading:-

Before the compulsory redemption the NAV of BGLF was approx. €411m – i.e. 442.8m shares at a NAV per share of €0.9282.

BGLF have used €23m (5.6% of the assets of the fund based on the NAV) to repurchase 24.8m shares – i.e. 5.6% of the shares in issue.

This is a method by which we shareholders have received the NAV value of €0.9282 on 5.6% of our shares even the market price of those share was approx. €0.65 per share. They have used €23m to pay us €23m – or, as above, they have used 5.6% of fund assets to buy 5.6% of the fund shares.

So, post the redemption, the fund NAV is down to 84.4% of the prior figure and the number of shares is down to 84.4% of the prior number – hence the NAV per share is unchanged. I believe/hope that I’m correct but please let me know if you disagree.

€23m did represent 8.2% of the MCap of the fund and 5.6% of the shares of the fund had a market value of €16m but I don’t follow how these are relevant to NAV per share under the redemption.

Going forward, if BGLF can continue to realise fund assets at NAV they can continue to repurchase shares at NAV – and if the market SP remains below NAV there is a gain to be made. Quite a lot of “Ifs” there!!

Best wishes