Pan African Resources

Broker : 22.02.11: -0.50, (10.25) Broker :Positive H1 results and the prospect of PGM production by the end of the year should see the shares... read more

Broker : 22.02.11: -0.50, (10.25) Broker :Positive H1 results and the prospect of PGM production by the end of the year should see the shares stronger. The company reported a 56% increase in earnings to 0.53p and a 51% increase in EBITDA to GBP12.95m revenue climbed 32% to GBP38.3m as the gold price rose. The Barberton operations produced 46,655oz of gold in the 6 months to December a 1.2% increase Y-o-Y. However costs were up 7% in rand terms (14% in US$) to ZAR176,199/kg ($767/oz) as security costs increased. The company expects to achieve 100,000oz production this year at sustainable head grades of 10g/t and anticipates beginning platinum production from its Phoenix Chrome tailings project by the end calendar year 2011. In a recent visit to theoperation we saw a clean extremely well run and efficient mine, the mine has morethan adequate development in place to enable flexibility in delivering plannedproduction. The company is currently drilling out the Fairview tailings facility whichdates back to 1986 pr the installation of the biox plant with grades of up to 2.5g/t. The company estimates that there is 3.5mt of material in the dam. We believe that shouldthe company could potentially add 20 to 30koz per year of production from this atmoderate cost. There are other dams in the vicinity (mining in the area dates backover 100 years) which the company could also exploit adding a sustainable leg to itsproduction profile. There is a good pipeline of news flow going forward which shouldsee the shares well supported. Source - Collins Stewart

Pan African Resources is on the hunt for major growth opportunities, including new acquisitions and joint ventures, while also planning... read more

Pan African Resources is on the hunt for major growth opportunities, including new acquisitions and joint ventures, while also planning to increase production through organic growth, the company?s chief executive said. Jan Nelson told Dow Jones Newswires there are "some projects on the table at the moment" that the board is reviewing for potential acquisition, and said the company, which Tuesday reported a 29% increase in gross revenue, is now well positioned "to take advantage of major growth opportunities to build Pan African into a significant mining house." In its full-year results ended June 30, Pan African announced it is debt free and increased its earnings before interest, taxes, depreciation, amortization and impairments 9.2% in the 12-month period, to GBP25 million. Revenue was up at GBP68.5 million, from GBP53 million. Cash and cash equivalents increased to GBP12.80 million, from GBP2.39 million a year earlier. Nelson said the board is looking specifically for new gold and platinum projects, but he didn?t rule out the consideration of other types of operations if they were to meet the group?s "low cost, high margin" criteria. Until last year, when Pan African acquired the Phoenix Platinum project in South Africa from shareholder Metorex, the company had been solely focused on gold production. It owns the Barberton Mines in South Africa and a gold exploration site in the Manica province of Mozambique. "If somebody brings an option to us with the kind of low cost and high margin of Phoenix [which has a forecast cash cost of less than $400/oz], then we wouldn?t ignore it," Nelson said. "But we are not on a drive to go out and buy, say, diamond mines," he added. Nelson said "strategic alliances" would continue to be a part of the company?s growth plan. Last August, Shanduka Gold--a subsidiary of major investment company Shanduka Resources--acquired a 26% stake in Pan African. "It was a strategic move by both companies to try and grow into a mining house," Nelson said. "They have got cash, and the network that Shanduka brings to the table will greatly assist the company moving forward." Pan African executives are also still in negotiations with Delta Trading, a Mozambican company, about potentially setting up a consortium to mine its site in Manica. In the year to June 30, underground gold production the Barberton Mines increased 2.7% to 97,483 ounces. Nelson said production, which was hampered late last year by illegal mining activity, will likely increase further in 2011, supported by increased capital investment. Almost GBP6 million will be spent at the mine in a bid to improve productivity significantly. Exploration is also being accelerated and focus in the year ahead will shift to the identification of shallow, low-cost mineral resources, the company said in its results statement. "This approach will not only see the production profile grow, but should also impact positively on the cost structure at Barberton," it said. The company also confirmed production at the Phoenix Platinum operations is expected to commence in the second half of 2011. A recent updated resource statement showed an increase in total resource of 16% to 469,000 oz of 4E PGM. Nelson said it is still too early to say when gold production might begin at Manica.

IC says buy (6.5p) : BULL POINTS Strong gold production cash flows - Profitable and dividend paying - Near-term growth projects - Influential local partner... read more

IC says buy (6.5p) : BULL POINTS Strong gold production cash flows - Profitable and dividend paying - Near-term growth projects - Influential local partner BEAR POINTS Gold reserves requires expansion - Not well-known

the African Gold mining company announces its interim results, which prompts Ambrian to repeat its "buy" rating and lifts its target... read more

the African Gold mining company announces its interim results, which prompts Ambrian to repeat its "buy" rating and lifts its target price to 6 pence from 5.5 pence. The broker highlights that production was up, costs were down, and profits before exceptionals were up, while the company has announced a maiden dividend of 0.225 pence. It adds with Pan African exiting its Ghanaian exploration projects, strategic focus for the company has now changed to near-term cash generation, citing the good results from its mine at Barberton should enabling the company to build cash steadily for future projects.