Pan-African Resources and Greatland Gold epitomise the value of UK mining stocks (Q&A) - Directors Talk26 Jun 2025 17:24
pan-african resources plc (lon:paf) and greatland gold plc (lon:ggp) are discussed by gervais williams, co-fund manager of the diverse income trust plc (lon:divi) in an exclusive interview about the trust and his views on some of the holdings in the divi portfolio.
************* said:
gold has hit record highs recently. now, i noticed pan-african resources plc (lon:paf) and greatland gold plc (lon:ggp) are among your holdings. do you see these positions as an effective hedge in the current environment or are they more about stock-specific opportunities?
gervais williams responded:
"nobody knows what the gold price is going to be, you can have views, he might be right, might be wrong. so, to some degree, one of the great advantages holding these kinds of companies in the portfolio is, at times of uncertainty, such as now, we are seeing the gold price go up. so, it is a form of hedge.
actually, we also see it as an opportunity where perhaps a good operator cannot just generate cash from selling gold but actually can bring new operations into production. we are seeing that particularly in both cases, pan-african resources and greatland gold. as that becomes recognised, the earnings stream becomes stable, then you get a better valuation. so, we think it is both.
if anything, i would probably extend this conversation to actually include many other mining companies. as we get into a period where perhaps, unfortunately, oil price will be higher, uncertainty is more out there, maybe there will be more issuance, quantitative easing and such like going forward, it may be that inflation is a bit more endemic than we would like. actually, including physical assets, mining companies, commodity companies in the portfolio, we think is a really important feature.
again, the diverse income trust does not just have gold mining companies, it has other mainstream mining companies as well and in that way, it means that just occasionally, not just that the oil price goes up, but some of these other commodities go up and you can actually generate disproportionate return – disproportionate cash – and often that is a time when perhaps the global economy is not that good anyway.
so, it is just an extra form of diversification and valuations are low. for that reason, not just in these cases, but many others, we think the mining sector is a terrific area for investing."
https://www.***************************/pan-african-resources-and-greatland-gold-epitomise-the-value-of-uk-mining-stocks-qa/4121204513
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