Historically this has been our lucky gold stock. Having sold up I lost all the gains here on the other gold stocks since then. The current price of PAF is tempting me back into gold but I am strictly steering clear of the tiddlers!
Yes, the new mine and the tailings will obviously reduce the overall AISC from the very high $1286 per oz. as mentioned in the operational update issued last week, which I thought was pretty dismal on most metrics overall - for me, anyway.
However, allowing for these benefits (impressive grades but over short / narrow strike data so far) my guesstimate for the AISC for this year would be to come in just shy of some $1000 per oz , given the relatively short contributory period involved. Better, obviously but more 'jam tomorrow', from next year onwards, if all goes well, I'd say.
In the meantime, there are the strike risks to be overcome and the new Government's passing of a highly contentious 'asset seizure without compensation' law, where appropriate, being introduced; that might not affect PAF directly but it hardly inspires confidence in my book and I'm very wary when I read that sort of thing...
Don't really know the new management's record, post Jan Nelson and I'm relatively out of touch with PAF generally, as I mentioned earlier. However, several brokers' forecasts are positive / upbeat about the outlook, so that's encouraging and thus I hope your renewed 'plunge' works out well for you - sasa.
I trust the management enough to have bought shares in PAF, yes. However, I have bought precious metal mining shares over a decent length of time to realise that a good result is not always guaranteed. There are lots of moving parts that are out of control of the Company's management such as currency values, mining difficulties, political interference, ore quality, staff issues...need I go on? PAF has had its fair share of these difficulties. Hopefully, a more tranquil business environment lies ahead particularly with the development and opening of the new mine.
Hi casa - yes, I was in this until a couple of years ago (sold at 17p I see from my records after a few years holding it) but I'm not that convinced that the 'sunny uplands' are yet looming into view. I'll study it a bit more when I have the time but for now...
Could well be wrong, of course and I'm less familiar with it than hitherto, I'll readily admit.
Your FXPO find at the time was clearly 'the one that got away' unfortunately but SQZ might emulate some of that, given the very cheap stats applicable, especially now. I like the debt - free balance sheet with monthly income simply accruing, meanwhile - sasa.
Thanks for your input, sasa. I didn't know that you had invested here in the past. I bought PAF about a couple of years ago at around 17p but hightailed it at 13p due to Zuma's economic ruination of the SA economy and the restrictions placed on miners which effectively made it difficult for them to turn a profit.
Yes, PAF much like many other Companies in SA have had labour problems which has effectively taken the sp down from 13 to under 8p. Hopefully these issues are behind them now together with a more business friendly political climate.
I admit that I was over excited about the progress with a new mine opening with excellent proved up resources and a history of good production before the Zuma hiatus.
The whole issue does depend on the actual gold extraction results against figures estimated as always with small miners. It looks good but atm, it's only a story.
As you can see, I have bought some shares but the house is still safe and with any luck, in spite of the many moving parts, a good result might see a doubling of the sp.
A comment on a totally unrelated issue is about FXPO. I looked at this steel maker at the height of the war in Ukraine. The sp dropped to 20p and I considered briefly whether to buy a small stake. Bear in mind that FXPO is domiciled in the Eastern part of Ukraine so effectively governed by proxy by Russia but who knows, so I backed off. No proper government and demand for steel at a low ebb. I looked at the sp yesterday and it stands at over 300.
I know it's unrelated but a producing gold miner with a future producing gold, not steel in a (hopefully) better politically free country ought to be able to emulate FXPO but probably not by 15 times lol.
Hi casa - been having another look at this after our recent chat, fwiw...
What do you think the current AISC is today? Seems a near marginal producer right now (great if AU turns sharply higher, of course but very costly if it doesn't). Been looking at the latest report and the figs look uninspiring to me, unless I've missed quite a few things.
Is Evander a problem now? That was their big 'coup' a while ago (after Jan Nelson moved on) and even Barberton seems rather problematic. Also, union squabbles recurring? Back in the day, PAF was almost invariably 'insulated' from strikes because they were inclined to pay 'over the odds to keep the peace' - a policy which Jan adhered to throughout his tenure (when I held a decent position in these) and it worked.
But now with union talks scheduled to avoid strike action? Dunno, about the current appeal even now, I have to say and I prefer the lower AISC producers to avoid negative gearing risks, as you know.
Just my initial take after a long absence but I could well be mis-reading the present situation, 'cos I know you like sound situations and good dividend payers when you come across them (which this certainly is right now) but hope it's not a yield trap - sasa.
Millionaires? Could we be that lucky? I'd settle for a 50 bagger lol. In reality, I will be very pleased if PAF performs well and that goes for the South African government too. If PAF ramps up production and pays a decent dividend, I think that will be sufficient for 2018. If all goes well then next year may be bubbly time.
PAF looks about the most sure fire bet that you will find currently although I do like SQZ too, a North Sea gas and oil play with no debt. I like PAF for its low cost production, the fact that it's a gold miner with an increasing amount of high quality ore and it yields a good dividend that is likely to increase too. South Africa has been a stable country with excellent natural resources and the new government looks like it is returning to proper recognised international standards of governance and economic stability. It relies heavily on commodities for income so I expect the new government to encourage Companies such as PAF to increase output rather than suppress and over tax them as experienced under the previous regime.
I have bought some PAF shares this morning for a price of just over 7.7p including dealing costs.
This is excellent news. I held PAF last year but sold out when Zuma made it impossible for the Company to make a profit. Now that he is gone and Ramaphosa is seriously tackling corruption and ousting Zuma's cronies, I have been watching PAF's reaction. I didn't know they were reporting last Friday and I hope I will not miss any spike up in the sp but I intend to buy in on Monday morning. It may not be plain sailing for PAF but it certainly looks like the storm clouds have lifted for PAF and thankfully for South Africa.
The average head grade for the Barberton Mines complex, which includes the Fairview, Sheba and Consort mines, has risen from an average of 8.7g/t during July to December 2017 to 11.5g/t which was recorded in the February 2018 production month. This 32% increase in head grade is predominantly as a result of mining high-grade ore at the 272 platform since January 2018. The latest on-reef development samples taken in the 272 platform, recorded an average grade of 99.2g/t (ranging from 2.2g/t to 1,320g/t) over a mineralised width of 3.36m along a strike length of 24m. This confirms that the high-grade areas of this mining block are now in production. This high-grade core of the 11-block MRC orebody is encapsulated within a 75m mineralised envelope with the remainder of the mineralisation retrieving an average grade of 10.5g/t. .."
"....BTRP regrind mill construction update
The construction of the regrind mill is proceeding according to schedule with commissioning anticipated in the last week of April 2018. On commissioning of the regrind mill, production at the BTRP is expected to increase to approximately 21,000 ounces per annum. ...."
".....Elikhulu construction update
Construction is progressing ahead of schedule with first gold expected in August 2018. Ramp up to full production of approximately 55,000 ounces per annum is expected to take no longer than two months, after which Elikhulu is estimated to produce gold at an all-in sustaining cost of production of below $650/oz, at the prevailing USD:ZAR exchange rate. In conjunction with the Evander Tailings Retreatment Plant, these two operations are expected to produce more than 70,000 ounces per annum. ......."
Good company strategy in order to get labour costs down and concessions on electricity and tax perhaps.
The unions will cave in if they want to keep their jobs and the end of the day take a 25% hit on costs and keep the mine running take it or leave it until the gold price rises i can see this happening all across the sector
If this is true then not only is a shadow cast over the Share price, the integrity of the company is thrown in the air. Paf has been solid for years, but the silence from them about such news and it's big implications is not good at all.
Truffle Asset Management are not impressed given the holdings RNS.
"a consultation process in terms of section 189 of the South African Labour Relations Act, 66 of 1995" means what exactly ? An argument between the parties about who said what officially.
IMO It looks like a halving of profits and return is already priced in but one of the reasons I liked PAF as a investment that came with the straight talking culture or expansion developed by Jan, the former CEO, has now gone.
What do others think ?
Time for an exit strategy, hold for the gold, or look the buy the bottom of this for the return on Baberton.
Ramaphosa may have served on the PAF board but the market doesn't seem to feel that this will do wonders for PAF shareholders. Maybe I take the announcements too kindly or there are things happening behind the scenes that I know nothing about. I wish I had the confidence to top my holding back up to the value it was 18 months ago!
There seems to have been few RNS on the institutional holdings side of thing. A couple seem to have have interests, and one has disposed of a % of their interests.
The CEO and FD also seem to have made purchases, although I note with interest that the CEO has taken out a CFD, which seems a trifle strange, and which arguably is more of a low cost bet, than acquiring shares.
Others may have a different of why he has gone the CFD route?
Anyway, sound like the board are attempting to send a message of some sort to the market. But the price has sunk anyway.
Maybe one of the selling institutions stock is overhanging the market.
R - Cyril R has got to be better for SA than the dreadful Zuma, and I hope that he is both good for the many black South Africans and the mining industry.... there is no reason why the two shouldnt benefit from better governance. ATB AR
Just a point. The replacement for Zuma happens to be an ex chairman of PAF, Cyril Ramaphosa, a very bright barrister who was instrumental in getting Nelson M. released, and happens to be business friendly and appears to be of high morality.
Gold is notoriously subject to changes in sentiment, and is a contrarian play against stocks doing badly..... SO I feel your comment about PAF taking 'years' to come good is more to do with your dsappointment than anything else. These miners in SA are a risky play, and still recovering from the commodities boom unwinding! BUT where there is high risk there is high reward - IF at the right time!
Meantime I am so glad to hear those poor miners stuck down a mine shaft in SA have now been freed. I hope they are all doing well now... it really wasnt nice for them, or their relatives, so relief all round.... and it just high lights how relatively easy our lives are by comparisson. ATB to all holders - AR
Did no-one read today's Update and Trading Statement (see News)? Technical problems, processing problems, industrial action (I thought they had good industrial relations, compared to the big boys), protests, reduced gold price, enormous reduction in EPS. Basically a profit warning. And there's a new man in Zuma's place.
I've held PAF for years and had recently got into profit, most of which disappeared with today's fall. It looks to me as if we are going to have to wait quite a few more years for all the correctional actions they mention to bear fruit.
Shuggle I am alas talking through my backside about the rising diagonal - UNFORTUNATELY it intersected horizontal support today, and thus it isnt surprising the 'dam burst', as 2 sets of support were breached today - BUT the SP sank to a another downwards diagonal (I have on my chart), and promtly recovered to where it is now.
Its going to be interesting to see whether the second diagonal becomes support, BUT clearly PAF and gold are having a tough time of it.... as I say, its probably just a matter of waiting for the recovery to kick in!!! IF you buy - and I NEVER listen to posters on these BBs (well very few anyway) as to whether any stock is a buy or sell, so I can only wish you lots of luck whatever you decide! ATB AR
shuggle - alas (and I hold a medest amount of PAF!) today the SP broke blow established support, and un surprisingly (its technically likely) the fall is more pronounced! - its the old dam busting phenomenon! Makets perked up today in the US, and its been a long (and somewhat mystifying!) bull run for markets) so hardly surprising gold continues to struggle.... I have certainly read the markets quite wrong, and have not done wellwith my PAF holding (despite the reasonable divi!) BUT gold will perk up at some point, and PAF will come charging back... the big question is when will markets finally correct, and by how much!? It would be great to have that info..... so, meantime, I bumble along!!! Despite that I havent had too bad a year at all, but its not nice when a stock struggles! Ah sentiment!
What goes UP comes DOWN, and VISA VERSA! I live in hope, and there is an interesting rising diagonal that suggests that the SP 'could' find support around (0R a tad lower) where it finnished today.... Just my view, and I could well be wrong, as I havent made the greatest fist of PAF (YET!) ATB AR
The company is pleased to announce that it has entered into exclusive negotiations with the joint administrators of ASA Resource Group Plc (the "Group") in relation to acquiring certain assets and liabilities of the Group ("the Acquisition"), which if successfully concluded may have a material effect on the price of the Company's securities. Discussions are ongoing and as such there can be no certainty the Acquisition will conclude.
ASA was formerly known as Mwana Africa, I dabbled there some years ago. ASA is still available to view at asaresourcegroup.com
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