Market research firm Edison Research has upgraded its forecast of dual-listed Pan African Resources’ earnings for the full 2023 financial year.
This follows Pan African’s presentation of its interim results earlier this week. The gold miner posted earnings per share (EPS) and headline earnings per share (HEPS) of $0.02 for the six months ended December 31, 2022.
Edison now expects Pan African’s normalised HEPS for the full year ending on June 30, to be $0.04.
Pan African has four major producing precious metals assets in South Africa –Barberton, the Barberton tailings retreatment project, Elikhulu and Evander underground, incorporating Egoli.
Further out, Edison estimates that development of additional productive assets will increase Pan African’s production to about 250 000 oz in 2026 and its normalised HEPS to about $0.06.
Output of 92 307 oz for the first half of the current financial year was towards the lower end of the range of what would ordinarily be expected, given full-year guidance of 195 000 oz to 205 000 oz, but was consistent with Edison’s expectations, Edison points out.
Edison says Pan African’s shares are cheap relative to both its historical trading record and its peers.
Edison’s core (absolute) valuation of the company has risen by 4.1% to $0.33c, based on projects either sanctioned or already in production.
However, this valuation rises by a further $0.16 to $0.21 once other assets are also taken into account, it states.
In the meantime, it notes that Pan African remains cheaper than its principal London- and JSE-listed gold mining peers on at least 86% of commonly used valuation measures, which collectively imply a share price of 36.8p in full-year 2023 and 33.3p in full-year 2024.
Also in full-year 2023, Pan African still has the eleventh highest dividend yield of any precious metals mining company, globally, Edison points out.