Member Info for salz

Good luck to you. Was invested from 2010 so did ok. Very easy, sold at 12p in March. Not a gold bug and think gold will go lower. Alot has changed over last few years as to gold and safe haven investing. Will look to get into commodities in a couple of years once deflation is out of the way. If I had not sold at 12p then PAF would have to rise near on 100%. It did not move on newsday so next wait is March for interims. Been out of market for a while so good to watch the markets drop and see what opportunities arise.

I think that is in line with split of investors. SA side naturally has institutional players and being year end results saw some movement, albeit small in currency value. Not sure if they ever managed to get a UK fund to invest on AIM side. Alot of UK holdings were retail. When sp was around 15p there were days of 35k volume traded on AIM so it just shows that the currency value is tidly. The analyst call was on Wednesday, but as usual they didn't release dial in or time to retail holders. Not sure why they keep doing that and in these days there should be a live webcast for UK side. They are against releasing quarterly figures so when you have 2 news days a year liquidity drys up with no (new) news.

Broker screen I use has been a real mess for PAF over last week. Very small volumes traded recently even compared to historically low volumes on AIM side. It can't be easy be a MM here. Transferring shares back and forth on JSE/AIM does not help to get an idea of real volume.

Good to see Cobus Loots admit they underestimated the low grade cycle and cost creep at Evander on Mineweb interview. Such a shame that the journalists on all three videos don't mention the sp collapse. I do wonder if Loots measures his company on dividend yield without realising why it grows when sp falls. Also good to see him show concern about the quality material they received from IFM and that replacement material will be lower grade. He also confirmed Rand benefit has to take into account inflation. Other article also picking up on cashflow and having to use debt to make dividend payment. They need a stable gold price up to December to make it. Interim dividend dependent on future gold price so not as progressive as promised to shareholders. Uptick in Evander grades but nothing solid to market.

Glad to see that you realise that we are in an international market that benchmarks against a dollar price, hence your comment on shareprice fall due to the USD and not Rand price. You won't find a foreign investor looking at the Rand forward curve on gold. It is no more than a buffer as rates change. The problem with keep quoting an emerging market currency is inflation. Wages, raw materials, power, have added to a lower bottom line, not just the lower grades. The wage increases are constantly looking at SA inflation. Look at the volume traded today on one of two newsday a year for PAF. WH Ireland are now quoting a 12p target that we left only a few months ago. Whatever way you look at it they are breaking even at a gold price around $1,100. Evander at $1,380, a loss making mine only two years after purchasing from Harmony. Often you will see the CEO in his introduction mention shareprice. They have a habit of not mentioning it because they are unhedged and moving into coal. Listen into the call as it will enlighten you about the faces at Edison, Numis, and the motley crew that never ask a telling question. Why would the CEO not buy a share or two if medium to long term it is a good bet. It all rests with the USD price as do all commodities.

Average gold price realised in year $1,212 v $1,303 Ounces sold 175,857 v 188,179 Cost of production up 7.7% (excluding one off ETRP costs) Electricity up 8.6% It would be unfair to look at Evander costs excluding ETRP as the acquisition was based on the sizeable tailings on offer. So Evander all in sustaining costs (unfair to look at all ins with ETRP loaded on top) $1,380 v $1,339. The PAF group all in sustaining costs stand at $1,093 v $1,049. With average gold price alot lower than the $1,212 they received at year end then things get tighter. Cash from ops is down with a negative balance at year end. This confirmed the need to borrow last year to pay the dividend. With net debt increasing and the overhang of paying debt back (used for dividend), then you can see why the progressive dividend never materialised. Of course they are offering an interim dividend to make up for it without knowing cash position next year. No mention of share price fall as usual. Costless collars still being used to mitigate Evander after failing to hedge Evander forward on acquisition. Few more share options taken along with Evander employee options. Cobus Loots last purchased shares over a year ago. Ron Holding leaves with chunky renumeration along with consulting fees after delivering a crashing shareprice. No mention of wage negotiations. Look forward to the analyst call.

Eskom price hikes and wage increases tend to net savings out in SA. All ins were as of interims so not sure gold was at $1400, seem to remember they got average price around $1230.

Next week will reveal what is going on at Evander. No updates on grades makes me believe that it will be a loss making mine in this low gold price environment. Recent all in costs were above $1200. It was mentioned in the past that Sibanye was the one company that may buy PAF but they are moving into platinum. On going wage disputes with at least 5% plus salary increaeses looking likely for miners at lower gold prices. Reference Glencore and their Eskom coal dispute and Uitkomst looks a poor move. What sums up the confidence of the board is no share purchases over last year. Why would none of them buy if they knew Evander was a world beating mine?

Have read his currency wars book. It is a good read and his views on currencies, rates,and inflation are a good read. Not sure if he is a gold bug but never really agreed with his view on gold as it was pretty high. The talk of all this yellow metal going via HK to mainland China has tapered off a bit. The Chinese play a crafty game and like all this talk. It will take more than retail gold buyers to move the metal up. In my view the Chinese like holding dollars and are more than happy to let the US be the reserve banker. On another note IFL in administration so PAF should release an RNS regarding the platinum plant. Worrying to see IFL give the reasons as, Eskom ouatages and labour dispute. SA govt seems to be anti business at present.

Was invested here initially thinking gold had one last leg back up but it kept falling away. Picked up the dividends and let it run a little giving management the benefit as they were approachable. There was a chance of them being bought which kept me in but I think they were not upfront on the situation at Evander and that they moved to early with acquisitions. They just seemed to have watched things slip away. Evander, no hedging, Manica, and not being active with the feedstock at the platinum plant. Worst of all they kept saying how well they did for the last two years based on the dividend without mentioning the constant sp fall. Others may like PAF and gold. Commodities in general look a couple of years away. Probably a good example of how poor miners are with regard the cycle and buying at the top. Even Glencore looks to have finally made the error of going public and moving from trader to a large investor in assets.

It did affect the last dividend payment to UK shareholders. The SA dividend was matched but in view of the strength of sterling that was not matched. When the accounts are released the sterling figures create difficulty as the rand has been hammered. Lower rand against the dollar has helped them so not sure about the fx being the culprit. AIM shareholders hold limited volume so liquidity is poor on AIM. The SA shareholders have really driven it lower. This ability to arbitrage also causes people to read into share price movements that are just a bouncing back of shares. The gold price is what killed the sp followed by a poor acquisition at Evander. That mine is still unproven 3 years after its purchase. The mine manager was actually booted out recently which was news to me and goes against previous pay packages and respect for the guy. Never really understood why Evander was not hedged on acquisition as the mine manager noted in a newspaper article that they were entering a low grade cycle. Put it down to weakness of FD or the overbearing Shanduka, who offloaded the coal mine to PAF. No director share purchases speaks volumes over the last 3 months. Analyst calls are normally cosy with no telling questions. PAF probably had a better leader in Nelson who may have seen the Shanduka scenario early. If you look at the company though on the charts it moved in line with rise in gold price. Were the directors really that good!

IFL who provide feedstock to the platinum tailings plant are close to going under. Ferrochrome price never recovered, hit by operational snags at furnaces, and having to cope with a strike on site. Think it was their Lesidi mine that came back online recently to give PAF correct specs. Not sure what they have in contract if IFL mothballs ops. IFL did try to combat Eskom outages a few years ago but never got the co-gen plant working as it should.

It is from one of the SA mining sites and is informative. They have been supportive of PAF in the past. I take it you had not seen it so posting it in full should help with your research. It picks up on points a number of analysts have been saying for the last 6 months. If you only want good news then wait until September. How are PAF and gold looking from a technical angle? Do you think Loots and other directors will buy shares to support the 40% decline in roughly 3 months. There is an ongoing share option scheme so may just stick with that as it has proven lucrative for the board over the last few years. These platinum assets at Shanduka were seen as being lumped on PAF a while back as Shanduka like the consumer playing assets in SA.

to get a handle on what may be happening behind the scenes at each company because the situation is not clear in either case. Briggs - 62 – is a highly respected executive who has been with Harmony for 20 years and has run the group since 2008. He has agreed to stay on the job until a replacement has been found, but no reason has been given for his departure with the official announcement stating only that he had “indicated his wish to retire as CEO and member of the board.” If there is something serious going on in the background that has caused Briggs to opt out the clearest “unofficial” confirmation will come if any other Harmony top executives subsequently announce they are leaving as well. At Pan African there are two issues: the influence of BEE partner Shanduka on the company and just how well management is delivering on its forecasts that mining operations at Evander are moving out of the “low-grade cycle” which have hammered results over the past 12 months. The trading update published on June 8 was not encouraging, reporting that the move into the higher grade mining cycle had been “slower than previously anticipated”. Pan African also announced it had agreed to buy the Uitkomst Colliery for R200m in cash from Oakleaf Investments and Shanduka stating “... the acquisition is expected to be immediately earnings and cash flow accretive to Pan African.” That purchase makes no sense for a mid-tier gold company, according to some industry observors, but it has been defended by Pan African CEO, Cobus Loots, – formerly the MD of Shanduka Resources before he moved to Pan African as finance director. In February, just before he took over as CEO from Ron Holding who, like Briggs, also announced unexpectedly that he was retiring, Loots rejected the suggestion that Shanduka might “unduly influence” Pan African. He declared: “Shanduka would be unable to vote on any such deal. It would be a decision for the other shareholders. We simply will not do any deal that is not massively value accretive to our shareholders.” Ja, well, no fine but – from where I sit – any future potential deal through which Pan African gets set up to acquire Shanduka’s marginal platinum assets will set off the alarm bells big time.

Harmony value typical of crazy SA gold shares Brendan Ryan | Wed, 22 Jul 2015 15:39 Print this page Send this article to a friendShare [miningmx.com] – THE collapse in gold equities on the JSE has created a situation where a mining entrepreneur with large “cojones” combined with access to funding could really make his mark, and Harmony is the obvious target. Gold shares have fallen across the board, but the Harmony share price has dropped to levels putting the group’s market capitalisation way out of whack with its peers. The unexpected announcement by CEO, Graham Briggs, that he intends stepping down has also triggered speculation about what may be going on internally at the group. The Harmony share price has dropped some 66% from a 12-month high of R38.50/share to current levels around R12.95 giving the group a market capitalisation of just R5.6bn at present. Over the same period, the Pan African Resources (Pan African) share price has dropped around 50% from 278c to about 140c currently, but that still leaves the company with a market cap of about R2.6bn. But when you stack Pan African up against Harmony on the fundamentals it’s chalk and cheese. Harmony is a gold major which produced just over one million ounces in the year to end-June. On top of that, Harmony owns 50% of the Morobe Joint Venture in Papua New Guinea which includes the Wafi-Golpu project - potentially one of the world’s most valuable gold/copper mines if it ever gets the go-ahead. Pan African is a mid-tier miner producing about 200,000 ounces of gold annually from two main operations - Barberton Mines and Evander Gold Mines. So, on the one hand, you have a 200,000 oz gold producer worth R2.6bn, and on the other, a one million ounce producer owning half of Wafi-Golpu which is valued by the market at R5.6bn. Doesn’t make sense, does it? According to one mining industry source: “It’s crazy. You could take over Harmony – probably get most of your outlay back by selling off its nine South African mines piecemeal because, realistically, no foreign investor is going to want to operate here – and then you sit free and clear with half of Wafi-Golpu.” Logic would indicate that either Pan African shares should take another hit or Harmony shares should stage a recovery, but markets are not always driven by logic – particularly when it now seems every analyst and his dog is predicting further drops in the gold price to below $1,000/ounce. I see that, according to a Bloomberg report on July 22, Goldman Sachs analyst Jeffrey Currie reckons “... the worst is yet to come for gold and that prices could fall below $1,000 an ounce for the first time since 2009.” The report adds that analysts from ABN Amro Bank and Societe Generale feel pretty much the same way predicting gold “will approach $1,000 by December”. But anyone planning a move on either Harmony or Pan African needs

If you read it correctly steam coal is mentioned as apposed to met coal, hence steel point. Good luck with September and your analysis and not touching base with the board. They are certainly delivering for you. Yes techs can work at times but glad I sold out on fundamentals as it has dropped from 12p to 7p in a few months. Anyway you can't argue that the drop isn't significant. Gold will decide this one as they're unhedged. Good 1st post, reigns handed over to you going forward.

Technicals is a risky play when the fundamentals are clear here. Gold has not been a safe haven asset as fund managers and the like really don't see the value. Holding dollar assets is far safer. Shorts may be closed out but with the news flow over the next year many hedge funds will keep slamming gold. I do think the market is seeing gold as low as $800 so there is plenty of money to be made. PAF are not a low cost producer as their all ins are around $1150. Loots thinks that if Evander sees high grades the group will get all ins to $950. That is still $200 off low cost prproducers. You have to ask yourself if they are unhedged then they have lost control of the company. The market will decide wheter PAF survive. Since the Evander purchase it has been all negative news. The liquidity in London is non existent so these drops see no buyers on the other side. Why has Loots not bought any shares? With oil falling coal becomes cheaper. Commodities are probably a couple of years away from bottoming out, its a long cycle.

The group is now loss making at these prices. No confirmation of what the grades are now at Evander as PAF release so little information to the market. If they do not hedge this month then it is over for this miner. Gold is in free fall, no support likely and interest rare rises are only six months away. Loots may not have been brave enough to hedge, he is young, but it really is a mystery why no forward selling was undertaken by the board. Very murky that one. Will be difficult to pay a dividend this year without drawing on debt. Next year they will come to the market with a rights issue as is the case when mmanagement fail. After that they will be snapped up for a few pence by another player, maybe the Chinese who will watch the board sweat. It nearly hit 6p yesterday so something is seriously wrong behind the scenes. No comment from the directors and most importantly no director buys. Clearly shows Loots & Co have little faith in the share price. Anyway the dividend will be getting towards 10% now. Giving back to you what the market has already taken.

I'm afraid they were not upfront about the low grade cycle. Hidden away in the prospectus and after receiving a mail from the old CEO, exiting the low grade was originally supposed to be last quarter 2014. So way out on that. At June 14 year end net debt was £5.6m. We'll see whether it is less in September, when they will once again surprise the market. It is clear that they now rely on the bank lines whereas in the past cashflow was strong enough. This coal asset is being paid partially by debt and it is only £10m. Increased credit lines makes me think Loots will go out and buy again. They sold Moz to Auroch for a pittance. All in costs were high in 2014 but helped by higher gold price. This year is alot worse. Don't forget the Absa loan was a gold loan, with gold delivered. Diversifying into coal is unheard from a gold miner. It spells trouble. Iron ore, steel, and even steam coal for power plants is less needed. Eskom will not deliver as the funding needed is large due to govt incompetence.

Let us see how confident the new CEO is and see him buying shares at this all time low share price. Other directors should show faith in their own company. During the low grade cycle it was noticeable how Loots & Co held off but share options were still filtering through to staff. Not wise to pay a dividend with cashflow tight and debt rising. These so called Chinese investors will be looking at a distressed seller soon rather than the board's belief that they have a strong balance sheet. Currently running at breakeven on their core gold assets.