Proactive Investors - Run By Investors For Investors

Pan African commits to dividend as debt falls

Group is on course for 200,000oz and 9,000oz of gold and PGEs [platinum] respectively this year said chief executive Cobus Loots
Pan African commits to dividend as debt falls
Gold prices rose by 12% in rand terms


South African gold miner Pan African Resources (LON:PAF) confirmed its commitment to ‘attractive dividends’ as interim earnings soared.

Cash generation increased greatly during the half year, said chief executive Cobus Loots, which allowed it to cut its debts by 40% in sterling terms to £15mln.

“As a result, the company remains well positioned to maintain its sector-leading dividend pay-out and take advantage of future growth,“ Loots said.

Pan African has been a beneficiary of the slide in the rand against the US dollar, with the local gold price rising by 12% at a time when it fell in US currency terms.

Revenues rose 29% to R1.58bn in the six months to December with earnings per share 100% better at R12.43. In sterling terms, earnings rose 98% to £10.9mln or 0.6p per share.

At its two main gold mine operations, Evander ‘s gold sales rose 34% as the underground head grade improved to 5.8 grams per tonne, or g/t (2014:4.3g/t), principally due to mining at 8 Shaft’s newly established 25 level.

Barberton’s sales rose by 7% to 56,500 oz with a head grade of 10.9 g/t (11.6 g/t).

Coots added that overall it was a  much improved operating and financial performance, underpinned by the stronger prevailing rand gold price environment.

“We delivered important operational improvements at Evander Mines, with gold sales and revenue increasing significantly.

“The Evander Mines Tailing Retreatment Plant has assisted our production growth and continued focus on low-cost, high-margin gold ounces.

“The group is well positioned to produce approximately 200,000oz and 9,000oz of gold and PGEs [platinum] respectively, over the full year period.”

Broker SP Angel, in a note, said: “Pan African is generating both profits and cash and should benefit from the continuing currency weakness.”

Separately, Pan African announced it was to buy Standard Bank's 16.9% stake in Shanduka Gold for an undisclosed cash sum

Shanduka is Pan African’s primary black economic empowerment shareholder with its sole asset being its 23.8% stake in the miner.

SP Angel added that Pan African is effectively buying a 4% beneficial interest in its own shares that may reduce possible dilution if Shanduka Gold is dissolved in future.

Shares rose 2% to 13.25p.

View full PAF profile View Profile

Pan African Resources plc Timeline

Big Picture
October 20 2017

Related Articles

November 27 2017
Goldplat's recovery business provides a cash-generating foundation for future growth
Balmoral Resources opening up new gold zones in the Abitibi
May 03 2017
Balmoral has delivered a string of attractive exploration results from its Martiniere gold project on the prolific Abitibi gold belt
August 04 2017
Klondex Mines has had an encouraging few months and in July posted operating results for its second quarter

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investor UK Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use