Gold miner Pan African Resources (PAF) turned in interim cash profits of £12.9m, against £28.3m in the previous year. Its performance was stymied by a low-grade mining cycle at its Evander operation in South Africa's Mpumalanga province.
The overall head grade, which measures the proportion of metal within mined ores from both underground and surface works, fell to 4.9 per cent, from 6.4 per cent a year earlier. Lower grades sapped volumes - the miner sold 86,675 ounces of gold in the period, down 13 per cent year on year - while also raising unit costs. But management believes this is a temporary issue, and the ore bodies at Evander have shown some improvement since the period-end.
While Pan African realised an average gold price of $1,231 (£794) an ounce - a decrease of 6 per cent from the $1,311 level achieved in the corresponding period in 2013 - the weakening of the rand against the dollar contributed to a higher rand-based gold price. This currency effect helped offset the impact of lower grades, but Pan African's all-in sustaining cash costs (which include expenses incurred in the complete mining life cycle) nonetheless increased by a fifth to $1,165 (£752) an ounce.
Edison anticipates EPS of 1.09p this year (from 1.46p in 2013-14).
| PAN AFRICAN RESOURCES (PAF) | ||||
|---|---|---|---|---|
| ORD PRICE: | 12p | MARKET VALUE: | £224m | |
| TOUCH: | 12-13p | 12-MONTH HIGH: | 16p | LOW: 11p |
| DIVIDEND YIELD: | 6.7% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 8p | NET DEBT: | 17% | |
| Half-year to Dec 31 | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 84.4 | 22.8 | 1.0 | nil |
| 2014 | 67.8 | 7.9 | 0.3 | nil |
| % change | -20 | -66 | -67 | - |
Ex-div: - Payment: - | ||||
