Member Info for Mike1959

Viable, it is a no brainer for me that we will go ahead with Warrego. As a very rough calculation, we are told that there are 16.5 million tonnes of mineral resource containing 1.1 gram/tonne gold and 1.3% copper. Guestimating the resource converts to say 50% economic reserves (8.25 million tonnes) that is equivalent to 825,000 tonnes year for 10 years Life of Mine. 825,000 tonnes of reserve at 1.1/t would convert to 29,177 oz of contained gold , say 93% recovery say 94% payable for the concentrates at say $4000/oz = $102 million revenue/year. Likewise at 1.3% copper this would convert to 10,725 contained copper say 93% recovery , say 85% payable in the concentrates at say $12,500/tonne = $106 million, that is a total revenue of $208 million/year. Assuming an upfront capex of $50 million or $5 million/year plus a AISC/financing costs of say $3000/oz of contained gold that is total costs of $92.5 million/year and a profit before tax of $115.5 million/year for 10 years. Obviously this is a very flawed basic number! PAF suggest the preliminary feasibility study will be out around July/August this year probably needing a Definitive FS 6-12 months later, so construction starting 2027/28 and production starting FY2030.

....yes,currently an all time high.

Mark, the 2027 production guidance is on page 12 of the FY2026 Interim Results on the Company website. I agree with your 4 points, particularly the first one.

LOL, sounds like you have your hands full, I am off to my allotment.

Element, PAF has gold reserves of around 13 million oz (resources over 40 million) otherwise I would not disagree with your comments. Here we are just a bigger fish in a smaller pool, none the less rewarding and for me easier to visualise.

But GGP is my second biggest gold share and I really appreciate your fantastic contribution to the GGP chat.

The H1 results are very thorough and much as expected although the AISC at US$1874/oz was at the top end of the indicated range last week.

Bustard, your two questions have been answered,FY27 production guidance has been set at 280,000 to 302,000 oz which looks somewhat underwhelming given our previous expectations although this might be upgraded when the FY26 results are out in September. The FY26 full year AISC guidance has been updated to US$1820-1870/oz which suggests an AISC of around US$1820/oz for H2, but the full year guidance is using an exchange rate of US$/ZAR 17.00 which looks out of date and infers a H2 exchange rate of 16.69 , but using an exchange rate of 16.00 increases the H2 AISC to USD 1900+/oz which will slightly reduce my previous FY26 estimate unless H2 production is at least in the middle of the guidance range..

Good to see that production in Australia is targeted as 100,000 oz within 3 years and the possible new projects at Evander (Poplar project) and Barbeton (Royal Sheba), capex for FY27 significantly increased to US$ 267 million. The FS on the Warrengo project has been slightly delayed to early FY27 which possibly delays the earliest production to 2030 but the Warrengo production numbers do not make sense to me and need clarification.

Likewise, hopefully imminent!

Mark/Patryk, I agree with your comments particularly on the outlook for 2027 production, how the AISC is progressing and that the gold price remains above $5000/oz. After rechecking my numbers I think that the H2/26 AISC could reduce to around $1800/oz if production is at the top end of the guidance particularly at MTR and Tennant but we will have the revised figure from PAF next week. On the 2027 expected production I do not expect an update next week or until September, so I am still working on the 315,000 to 325,000 oz that we have discussed before.

If the H2 gold price averages say $5000/oz (that is around $5060/oz for the remaining 4 and a half months) with production of 275,000 oz (the bottom of the guidance) and a H2 AISC of say $1800/oz then with a bit of luck, I think the share price could increase to say 173p by the end of June which would be equivalent to a 2026 PE of 11. I think it is worth saying again that gold miners in S Africa (for the time being I am ignoring that roughly 15% of production is from Australia) face a progressive rate of corporation tax so that the percentage of tax gradually increases as profit before tax increases relative to revenue. Also in H2 we have to pay about $9 million to Emmerson Resources in Australia, I assume this will not increase the AISC as it will be classed as exploration costs which are not sustaining costs but it will still hit the profitability (I assume it cannot be depreciated?).

For 2027 based on production of say 320,000 oz, the gold price remaining at $5000/oz and the AISC at $1800/oz (hopefully higher production offsetting inflationary pressures) then I could see the share price increase to 225p this time next year, a forward 2027 PE of around 10. All ifs , buts and may be's. As you say, if this can hold at $5000/oz the share price will gradually rerate, even better it we increase to $6000/oz!

Mark, the FY26 full year guidance for AISC of US$1525-1575/oz was set before July 2025 based on US$/ZAR 18.50 and other things being equal. But since then this has been blown totally out of the water in H1 by the weaker US$, higher gold price, higher share price and production at the lower end of guidance hence the indicated AISC for H1 of US$1825-1875/oz. Certainly for H2, US$1525-1575/oz is totally dead and buried for the reasons explained above which are now even more pronounced, the US$ is even weaker, the gold price is even higher and the share price is even higher than in H1. You are right that production in H2 will be higher than H1 so spreading the fixed costs over a greater volume and much of the increased production will be at MTR and Tennant which are tailings and above ground stocks/open pit which have a considerably lower AISC than the overall average AISC. In particular , H2 production at Tennant will be more than double the H1 production largely as the ore grade will contain 2.22 grams/tonne of gold compared to only 1.15 in H1.

PAF will give us a new revised H2 AISC in the interims next Wednesday which is hopefully slightly below US$1800/oz which particularly depends on the US$/ZAR exchange rate used but they tend to be cautious with the rate used, I have used US$/ZAR 16 which mainly explains why I expect a number north of US$1850 (today is even worse at 15.82) . I must admit that I was unaware of the bonus scheme tied to share price until the recent operational update and I am still not sure how it works, although I totally agree that the workforce should also benefit from the high gold price and incentivise their hard work. Let us discuss further next week.

Some might say we are being petty on looking at a US$ 200-300/oz increase in AISC when the gold price has increased by US$1000-1500/oz and and that a weaker US$ increases the gold price but also increases the AISC more most gold miners.

You say terribly cold, but it is all relative and must have been a lot warmer than here! You need to book another one!

Mark,thanks for your reply. On the AISC, PAF had given us a guidance for 2026 of $1525-1575/oz but in the operational update on 16th Jan advised in H1 it was likely to be $1825-1875/oz, The explanation was that the weaker $/ZAR has added about $ 115/oz, staff bonuses due to higher share price about $80/oz , higher royalties say $13/oz plus others (particularly processing 3rs party material at Evander/MTR) say $92/oz.

For H2 if we start with say $1850/oz as the AISC, I have assumed ZAR 16.0/$ which adds about $148/oz, extra bonus $14/oz (assumes the share price increases by 24% to 150p by the end of June), royalties increase by $12/oz (based on an average gold price of $4800 compared to h1 $3812) then $92/oz reduction due to no 3rd party processing at Evander/MTR , finally a $68/oz reduction due to higher volumes at the other sites ( very roughly I assume Cost of Production is 30% fixed costs and 70% variable costs). It is a very rough calculation and we still have over 4 months to go so lots of things can happen.

Hope your fishing went well!

Cracksniper, likewise thanks. My stop loss timing was terrible, I have not bought back in here but reinvested part in GGP.But PAF remains my biggest share by far and I will rethink my strategy on stop-losses particularly for gold miners!

BlueDefender, Anglo Gold said it expected to pay 50% of free cash flow at the year end as dividends while Gold Fields will pay 30 to 45% of normalised earnings as dividends. Just last week Barrick Gold introduced a new dividend policy targeting a total payment of 50% of attributable fcf on an annualised basis consisting of 4 equal quarterly dividends and the balance as a special dividend. So PAF is in the same ballpark as these big boys.

I suppose the other alternative for gold miners is to use these unusually high profits is to increase their resource/reserve pipeline either by increasing exploration costs or merger and acquisition. Last year UBS reported that nearly 70% of gold miners covered had less than10 years Life Of Mine.

Cracksniper/Bustard, yes, excellent results! I would suggest that the share price increase today is due to this news, as we have increase more than the majority of gold miners, expected results are theoretical while actual results are reality. A H1 EPS of say 7.4 cents would suggest that the Profit After Tax is around USD 150 million. We know the revenue is around 487 million so some of the costs are possibly higher than some of us expected and/or the percentage of corporation tax is higher than expected, we will find out next Wednesday.

Regarding the AISC, I believe PAF is doing a great job to control this where possible but a weaker USD against ZAR, higher royalties due to the higher gold price, higher share price increasing workforce bonuses ,possibly higher cyanide costs are all outside of their control. Although PAF has said they expect H2 AISC to be lower, I expect it to be higher. Based on H2 AISC of say USD 1880/oz, gold price of USD 4800/oz and production of say 146,704 oz (or 275,000 oz for the full year) and corporation tax increasing to say 34.5% I get H2 Profit After Tax as USD 259 million or 72% up on H1. For the full year Profit After Tax of USD409 million, based on today's share price this is a forward PE of exactly 10.0 which is starting to look fuller value. If the AISC where to be lower, or the production to be higher or the corporation tax lower and more importantly if the gold price remains stable or increases then that PAT could be higher.

Viable, well done for finding this. I see the SENS with this information is now out in S Africa but no equivalent RNS for London yet. The EPS is very slightly lower than the 8.0 cents I had hoped for but it is still an absolutely fantastic performance. I suspect the gold sales possibly slightly trailed the production number , if so hopefully we can catch up in the second half where we have a higher gold price. The expected H1/26 EPS is higher than the EPS for the last financial year.

Looking forward to the full interims next Wednesday!

Charles, I know what you mean, and it is even less with the withholding tax.However small, it is a sign of things to come.Capex was USD 156 million in 2025 and expected to be over USD 147 million this year and we are starting to reap the benefits of increasing production and net debt will be paid off this month.

In the last annual accounts the Company clearly laid out its dividend policy, "Pan African believes a target payout of 40 to 50% of net cash generated from operating activities,after providing for the cash flow impact of capital expenditure ..... is appropriate". The board have a laser intensity of investing wisely and avoiding vanity projects. On this basis, the dividend for the full year will increase substantially and bodes well for the future.

Although much has been said recently about the strong platinum/pgm price the chrome price has increased $8/tonne this week to $300/tonne , the highest price for 9 months is up this week. That $8/tonne increase is equivalent to a $92/oz increase in the Tharisa pgm basket price. Based on this weeks prices, chrome $300/tonne and Tharisa pgm $3031/oz, chrome is still contributing a bigger amount of revenue than pgm on an annualised basis.

Hedgehogg, yes strong Barrick results, net Q4/25 EPS up 88% on Q3. But I am shortly expecting even better H1/26 from PAF. Although the PAF interim accounts are out on 18th Feb, hopefully we will see the SENS/RNS next Friday informing us that there is "reasonable certainty" that the EPS will be up more than 20% on last year. If sales are not too far behind the announced production then I expect an EPS of around 8.0 cents which would be up well over 200% up on the 2.35 cents of H1 last year and actually greater than the 7.16 cents for ALL of the last financial year. I get H1/26 Profit Before Tax as USD 231 million. Although most S African companies pay 27% corporation tax, gold miners pay a higher rate as profits increase relative to revenue , so I very roughly calculate PAF will pay 30% corporation tax (28.49% for the 2025 financial year) making the H1/26 Profit After Tax USD 161 million.

Earlier this week Harmony Gold partly blamed lower recoveries on a South African shortage of sodium cyanide, hopefully in H2 this is not a problem for PAF and that they have covered their requirements well forward although the higher prices will inevitably marginally add to the AISC.

MIDODX, thanks for your tip.I have used stop losses many times and it has generally gone well but on this occasion it was a total disaster.But my investments had become totally unbalanced over the last 6 months with over half invested in metals, particularly gold, silver,pgm's so having made some big returns it was good to rebalance to a level that I am happy with but still retain a big holding in gold.

That is the thing about investing, things change and we are always learning.🙂

Hi Patryk, no.Rather a disaster today for me, my stop loss at 120p was near the bottom and then the price recovers nearly 10%. I will just put it down to experience and PAF still repreaents my biggest share.

My stop loss at 120p has been executed so that is 40% of my shares sold. Like the sentiment below I will hold onto the rest.

On 2nd Jan the gold price was $4386 and the PAF share price was 120p.

The average gold price in January was $4747 and the price is currently around $4893 so we are still above the January average. If the price can consolidate and start to build again without going below $4747 then I would be relatively happy with that. GLA.