Pan African Resources Company Research (PAF)

Pan African’s 11 June operational update indicated FY25 output 3.9% below the bottom of the previously guided range. However, the shortfall reflected little more than Nobles and Evander failing to hit what were otherwise relatively aggressive production targets. Production in H225 was still at record levels and almost one-third higher than in H1. Our prior production forecast was at the bottom of the guidance range and we have only had to reduce our FY25 forecast production number by 4.2%. This has been more than offset by outperformance in the gold price. In addition, some output from Nobles and MTR/Mogale, which we had expected to be classified as ‘pre-commercial’, we now expect to be classified as ‘commercial’ and included in PAF’s income statement for FY25. Taken together, we have upgraded our FY25 normalised HEPS forecast quite materially, from 6.79c per share to 8.15c per share (see Exhibit 3), while our overall valuation of the company has also increased, albeit more modestly, owing to the recent strength of the rand against the US dollar.