Africa-focused gold miner Pan African Resources (PAF) reported further growth at the full-year stage. That progress looks set to continue next year, too, as management works on closing the transformational acquisition of the Evander gold mining complex, which will double annual gold production to nearly 200,000 ounces - leaving the shares looking attractive.
Meanwhile, the company’s reliable Barberton gold operations in South Africa continues to deliver healthy profits, with the decreasing value of the South African rand helping the company to lower cash costs year-on-year by 0.6 per cent to $776 (£479) per ounce.
Barberton produced 94,449 ounces during the period, up slightly from 92,197 ounces a year earlier, but a 24 per cent rise in the gold price boosted turnover and profits substantially. In addition, Pan African’s Phoenix chrome tailings plant added some 3,384 ounces of platinum group metals (PGMs) after being commissioned earlier in the year - broker finnCap expects it to produce around 9,000 ounces of PGMs in the year to end-June 2013.
Prudently, but disappointingly, Pan African decided to forego a dividend this year in light of the Evander purchase, but expects to reinstate one next year. finnCap forecasts adjusted EPS of 1.8p in for 2013 (2012: 2.0p).
PAN AFRICAN RESOURCES (PAF) | ||||
|---|---|---|---|---|
| ORD PRICE: | 18.5p | MARKET VALUE: | £268m | |
| TOUCH: | 17.5-18p | 12-MONTH HIGH: | 19p | LOW: 11p |
| DIVIDEND YIELD: | nil | PE RATIO: | 9 | |
| NET ASSET VALUE: | 7p | NET CASH: | £19.8m | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 39.3 | 11.9 | 0.52 | nil |
| 2009 | 53.0 | 16.3 | 0.40 | 0.26 |
| 2010 | 68.5 | 22.2 | 1.04 | 0.37 |
| 2011 | 79.2 | 26.4 | 1.20 | 0.51 |
| 2012 | 101 | 42.2 | 2.02 | nil |
| % change | +28 | +60 | +68 | -100 |
