Pan African Resources PLC's (AIM:PAF, OTCQX:PAFRY, JSE:PAN, OTCQX:PAFRF) full-year dividend (1.2c) was much better than expected and a signal of management's confidence in the MTR ramp-up and gold price strength, suggests broker Peel Hunt.
In 2024/25, Peel Hunt expects production of 216,000oz, which the broker said is towards the bottom end of guidance (215-225koz) meaning that a strong ramp-up curve at MTR could see upgrades.
MTR is the fourth tailings retreatment project undertaken by the South African gold miner.
Cash costs in the year just ended were in line with expectations both absolute US$m and measured on a unit basis, noted Peel Hunt, which should boost confidence that as output rises in the present year so should underlying profits.
“This, allied with the confidence in cash costs, means we expect a rapid deleveraging through the year and biased to the second half, particularly in the present gold price environment.”
Buy with a target price of 33p is the broker’s view.