Shares of Pan African Resources PLC lost some shine on Thursday after mixed production guidance for the first half to December 31.
Berenberg this morning warned that it expects shares to come under pressure after Pan African’s operational update.
The German lender maintained a share price target of 45 pence and a ’buy’ rating on Pan African, which has a market capitalisation of £768.2 million.
Pan African shares closed down 2.5% at 37.45 pence in London on Thursday, and closed down 0.5% at R 8.58 in Johannesburg.
In London since December 13, 2023, the stock has more than doubled.
On Thursday Pan African guided for production in the first half of financial 2025, which ends on December 31, to be in line with the 87,581 ounces recorded in the second half of financial 2024. But Berenberg said this is ‘lighter’ than its 97,000 ounce estimate.
Pan African guided for annual production of 215,000 ounces for the year ending June 30, 2025, compared to previous guidance of between 215,000 ounces and 225,000 ounces.
The gold producer expects output between 235,000 ounces and 250,000 ounces, excluding the contribution from Tennant Consolidated Mining Group Pty Ltd, for the 2026 financial year.
While this estimate is in line with previous guidance of 250,000 ounces, Berenberg said this prediction has ‘perhaps a touch of conservatism added in’.
Berenberg said Pan African had not steered to cost guidance, assuming that this will likely come in at the top end of the $1,350 to $1,400 an ounce range.
On the plus side, Pan African has reiterated that it should be fully de-geared in 12 to 18 months and has flagged a $5 million to $8 million capital expenditure saving for Mintails, which ‘is positive’, Berenberg said.
Pan African commissioned the Mogale tailings retreatment operation early in October. In October 2022, Pan African acquired Mogale Gold Pty Ltd and Mintails’ SA Soweto Cluster Pty Ltd for R 50.0 million. Mintails Mining SA, which owns two mines, was placed in provisional liquidation in 2018.
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