Pan African Resources PLC (AIM:PAF, OTCQX:PAFRY, JSE:PAN, OTCQX:PAFRF) is moving into a period of strong cash flow suggest analysts at Berenberg, particularly through the development of the Mogale Tailings Retreatment (MTR) project in South Africa
Elsewhere, Evander underground’s various infrastructure projects as part of its move to Level 24-26 are progressing, albeit the commissioning of the sub-vertical hoisting shaft at Evander 8 underground has been delayed until later this month.
At Barberton, operational enhancements and optimisation initiatives underpin expected production growth.
“Against this backdrop of near-term production growth, particularly with the MTR project offering low-cost growth, as well as improving margins (underpinned by a gold price environment that is well supported around cUSD2,500/oz, in our view), we expect Pan African to enter a period of enhanced profitability.”
Major capital projects are also nearing completion and Pan African should move to a net cash position by fiscal year 2026, the broker estimates.
M&A is a possibility, but not necessary, Berenberg says, with h growth prospects already good as they stand.
Instead, the broker sees heightened shareholder returns either through dividends and/or share buybacks.
Target price is 33p and even with a more than 80% jump this year can go higher, the broker adds. Buy is its rating.