Member Info for Mike1959

Patryk, PAF has done tremendously well in the last 1/3/6/12/24 months and has outperformed the vast majority of gold miners for very good reasons that we have all discussed in much detail but PAF is now starting to look nearer its current full value relative to the fair value of other gold miners, even though there is still a lot of potential upward movement for PAF and other miners if the gold price plays ball. I suggest the is the reason why most gold miners are outperforming PAF today.

As a broad barometer I tend to us AUCP (Legal and General Gold Mining ETF which aims to track the performance of the DAX global gold miners, PAF is up 30.35% over 1 month and 85.79% over 3 months while AUCP is up 11.80% over1 month and 42.94% over 3 months.

Oufc, there are a few issues and constraints at play here besides the financing explained by Moneyman64 below. After Tharisa developed Salene Chrome in 2022 the Zim government introduced a ban on chrome exports (to increase asset added value domestically) so that local chrome producers could only sell to local ferro-chrome producers or had to beneficate the ore into a higher grade chrome concentrate acceptable to the authorities. Some smaller chrome producers did this are are now allowed to export their chrome concentrates (or sell to the local ferrochrome producers) but Tharisa decided this was not commercially viable and despite the investment have mothballed the plant.

There is no pgm refinery in Zimbabwe although Zimplats have been upgrading local pgm concentrates into furnace matte and in 2025 tripled their production capacity to 380,000 tonnes/year of concentrates. This furnace matte can then be exported , mainly to South Africa. So presumably Karo will send their pgm concentrates to Zimplats for benefication to matte which can then be exported. The Zim government would like to see a domestic refinery to keep more of the added value in Zimbabwe.

Due to currency requirements the pgm producers can only keep 70% of the value in a foreign currency such as USD or ZAR and the other 30.% is compulsorily converted to the local currency which causes problems for the producers to use domestically and in addition the government is slow to pass this on to the producers, in their accounts last week , Valterra, said they were still owed the equivalent of of over USD 100 by the government from 2025 and it would still take months to get back. Also pgm miners have to pay for their electricity in foreign currency.

In 2019 Karo was granted a Special Economic Zone status which included lower corporation tax for the first 5 years (15% rather than 24.72%) , duty-free importation of equipment and raw materials and exchange control rulings but the Zim authorities say the SEZ is no longer applicable which would add tens of millions of USD to the project . Karo are still in discussion with the authorities to sort this out which adds further delay to the financing (and Zim government revenue stream).

Buys currently ahead of sells and current gold price $5225 up about 0.8% on the day so I suggest around 182p.

We are effectively 5 months into H1/26 so I am expecting H1 profit after tax to be 10 times higher than H1/25 and equal to all of FY25.

...yes they are intriguing.Hopefully the full 2025 accounts will be out by the end of March,then the updated MREin Q3 and hopefully profitable by Q2 or Q3 2026. They tell a good story but personally I want to see that they are delivering on what they suggest and promise. So I might look to have a flutter later this year although obviously if the numbers are good then the share price will be much higher than today!

....just a technical glitch, the bid and offer were well below 200 even though the price was showing as 200

p +11.11%. Now back to normal and heart beat back to normal😊

Cracksniper, Apologies to the others if we are slightly off piste.

I have had a look at Talisker. They are certainly at an early stage to develop what seems fantastic potential with an extremely high gold content of 6 to 9 grams/tonne. From the Jan-Sept 2025 accounts they are clearly losing money at the moment having only started production in July last year. They are clearly reliant on the gold price remaining high. If they produce say 20,000 oz gold in 2026 at a gold price of USD 5000 (about C$ 3650) I think they could be slightly profitable in 2026 Production of say 49,000 oz in 2027 and gold remaining at US$ 5000 could put them on a PE of less than 7. Production looks like 68,000 oz in 2028 , around 80,000 oz in 2029, 2030 around 95,000 oz so I could not see them hitting their target of 200,000 oz/year until 2032 at the very earliest.

If you are a gambling person and believe they will hit their time line and the gold price will remain kind then this would be a wonderful investment but too many risks for me in particular how they pay for this massive expansion to open a second and third mine, install their own mills (currently all ore is toll treated externally), continue exploration which in all could easily cost C$ 200-400 million over the next 5-10 years, they only have a cash position of C$ 33 million, debt of C$1.6 million and an unused credit facility of C$35 million. So they will have to borrow a massive amount of money or issue more shares which would dilute current shareholders.

It is not a reportable event so generally, no. But it could be confirmed in the next release .

Cracksniper, just had a quick look. Production of 350,000 oz, gold $6000, AISC $2200, PE ratio of 15 would give a share price of very roughly £4.45 so near to the possible £5 that you mention if everything goes as hoped.

All very big assumptions but we can dream!

Tigger/Patryk, without wanting to be a party pooper I do not think we will see £2 before the end of March unless the spot gold price jumps to $5400 or the average price since the start of H2 increases to $5100. I am still working on a H2 AISC of around $1900/oz based on the current USD/ZAR exchange rate/current royalty levels/current share price increasing incentive payments. I still hope that you are correct and will freely admit it. Nevertheless the share price should gradually rerate during H2 as the actual gold price is locked in. Great momentum in the share price today with buys outnumbering sells more than 2:1 partly due to a massive 1.5 million uncrossed buys at the end of the day which suggests institutional buys and a promising start tomorrow.

I am expecting total dividends of 7.5 to 8..5 c for FY26 and 12-13 c for FY27 despite the massive increase in capex announced last week so you should definitely build this into your exit strategy.

Viable, your information is right enough but the attachment is the wrong Polpar project, this one is in Canada.

Patryk, I don't think you are right but I hope you are!

Don't remind me, just shows what do I know and at least you bought back in

Always good to have other opinions.

Mark, great to read that we are now even closer. The standard corporation tax in Australia is 30% less capital allowances while this is not progressive for gold miners. In South Africa the standard corporation tax is 27% less full capital allowances in one year but this is progressive for gold miners if their gross profit increases relative to turnover, the formula looks unique to each company. To make this even more complicated PAF has a big deferred tax number, on page 40 of the interim accounts (S African tax 21.585+Australian tax 2.801+ deferred tax 37.705= $62.091 million total tax). Yes, I have gone for the higher rate because of the progressive rate in S Africa but I could well be wrong.

To complicate things even more, gold royalties in the Northern Territories of Australia appears to have been recently changed to a fixed 3.5% of gold revenue (although the H1/26 number was around 7.7%?) while in S Africa the number seems to be lower at around 0.9% of total gold revenue and it appears there is no royalty on revenue from tailings?

I agree they won't always be like this- but great if they were! We have got to the end of the week without the Chinese market open and the gold price has held up well.

Hopefully Patryk will just have to wait until next week for 170p but you know my thoughts that the share price could slow down in the next few months unless the gold price increases and/or the PE ratio rerates. Fingers crossed for both.

A good weekend all.

Mark, likewise thanks. I have reduced my financial costs to reflect some interest income from being net cash rich but conversely I have increased the 2027 royalties to over $20 million and increased the corporation tax to 31.5%.

No need to apologise for banging on about forward production, it is an important piece of the jigsaw. We have multi-bagged over the last 12-18 months but being realistic the percentage rate of gain will certainly slow down but we will still get gains. Between gradual share price increases and dramatically growing dividend we will still outpace most non-gold shares if the gold price remains stable.

Viable, DRD is primarily a tailings operator which has considerably less risk than PAF with 60% tailings and 40% underground (can you imagine having to take over a hour to travel up to your work position up to 2.4 km underground where the ambient temperature is well over 50 centigrade and needs refridgerated air conditioning to keep the temperature at a workable level) which is reflected in the DRD forward PE of around 16 compared to nearly 10 for PAF.

I would suggest that listings in S Africa and London are sufficient for PAF and that we do not require secondary listing in the US (DRD are not listed in London) which just adds extra costs and paperwork. PAF are already included in most major gold ETF's and shareholders include some big international funds. Also DRD is 50.1% owned by Sibanye Stillwater. PAF are steadily rerating.

In the Company presentation earlier this week , Cobus Loots did not rule out further buy-backs.

When you find those new emerging company opportunities please let us know!

Good morning jjhbev, yes, I have suggested FY26 production as 283,500 oz, the midpoint of the guidance, but realistically I think this could be a challenge and H2 production no more than 150,000 oz.

For FY27 I have suggested production as 290,000 oz, the midpoint of the PAF guidance of 280,000 to 302,000 is 291,000 oz. PAF has already indicated that 2027 production at BTR will be slightly down on 2026 and that production at Barberton and Elikhulu should be similar (let us see how the switch to the Winkelhaak pumping station using Leslie/Bracken tailings effects production), we have yet to see that the increased production rate at MTR can achieve around 60,000 oz/year. Nobles ore throughput is still restricted to 840,000 tonnes/year until the increase to 1 million tonnes is in place so they need to be putting through a gold grade of 2 grams or more per tonne to achieve the minimum guidance of 50,000 oz, also PAF has not yet confirmed if the Nobles guidance includes any White Devil production attributable to Emmerson Resources.

The Evander under performance 18 months ago was due to the delay in just one but incredibly important new investment but this is now running smoothly.

I agree with you and Bustard that 300,000 oz is achievable in 2027, possibly even 310,000 oz if everything goes well .Good to talk!

Mark, great summary! As you say, although Edison is sponsored by PAF Edison clearly they do not have total access to PAF information/expectations. Part of this is legal given closed periods and insider trading regulations and allows Edison to act in good faith and PAF does want to encourage other financial reviewers. Sometimes it can be in PAF's advantage if Edison is slight out on some numbers such as the expected 2027/2028 production, Edison got the projected Warrego gold production wrong suggesting it was 100,000 oz/year (when is should have been total production in Australia would increase to 100,000 oz/ear once Warrego was producing) but sometimes Edison can go the other way, for example overegging the expected tax rate. Even lords are not always perfect! But overall I find the Edison reports incredibly informative and realistic.

As you say, it looks like small but steady production increases between 2027 to 2029, but there should then be a step up again between 2030-2032 when hopefully the Soweto Cluster/Warrego/Evander Popular project are happening.

I will stick with my suggestion of a 173p share price by June based on an expected 2026 PE of 11. Based on your 2027 model (gold $5000/oz, 300,000 oz sales/production, AISC $1950 my expected Profit After Tax is $595 million so only 4% lower than your $620 million. I think your PE of 11 might be too optimistic, but you might be right, if I stick with a PE of 10 then that suggests a share price of 215p by this time next year. Or if the average gold price was say $5,500/oz this would increase the share price to 250p. For me we would have to see a 2027 gold price around $6000 to see the share price up to £3 by this time next year, you never know. I will not try to model further forward as there are just too many variables.

Waterloo, yes, it looks like future production increases are possibly starting to level off but there will still be smaller increases and as usual it all depends what the gold price does. But before you consider jumping ship please take into account the massive jump in dividends for the next few years , other things being equal, the dividends will be greater than most FTSE 100 businesses and that PAF are currently in the top 20% of FTSE 250 companies and an increase in the gold price to say $6000 could see them in the FTSE 100 within 18 months with some rerating expected from this.

Mark, while PAF have given forward estimates for individual operations they have never given a total production guidance more that 18-24 months and yesterday was their first guidance for 2027. I suggest we have been swayed by the last 5 Eddison reports which has shown bar graphs with PAF total production around 320,000 to 325,000 oz. The last Eddison report on 29th January still shows the bar chart Exhibit 6 with 2027 production around 320,000 to 325,000 oz with 2028 even higher.

Going back to basics and ignoring the Eddison reports, I would now suggest the 2026 production will now be maximum 283,500 oz (the middle of the 275,000 -292,000 guidance rate, then 2027 290,000 oz (guidance rate 280,000 to 302,000 oz) roughly based on Barberton 65,BTR 12,Evander 52,Elkihulu 49, MTR 60, Nobles 52. Then 2028 303,000 oz, 2029 311,000 oz including say 20,000 oz from the new Soweto Cluster plant, 2030 334,000 oz including say 30,000 oz from the Soweto Cluster.

While White Devil in Australia should start in about 5 months it is worth remembering that this has been classed as a major mine so that PAF will only get and pay for 60% of the production and Emmerson Resources the rest. I am assuming production at Warrego would not start until 2030/2031.. While the Popular project at Evander will be a massive boost and start to tap into the banked reserves I think this would not start to produce until 2031/2032 and by then underground production at Evander and Barberton could be under cost pressure, all depending on the gold price. As usual, always happy if others want to suggest different numbers.

Thanks Element. For those old enough to remember Bob Hoskins in the BT privatisation slogan, "IT IS GOOD TO TALK"!

Viable, on page 78 of the interims PAF show the actual recovery in H1/26 for their taiilngs as 48% (39% for H1/25). For other companies processing even lower grade of tailings such as DRD the recovery is even lower so you 30% could be right for some processors.