A small South African based precious mining group that produces gold and platinum from high grade ore bodies at a low cash cost. I have a holding in my growth portfolio (epic code: PAF).
Pan African Resources announced their interim results today and were in line with their trading update on 29 January.
The Group's gold sold increased by 123.0%
to 100,172oz and Gold reserve inventory increased by 666.7% to 9.2Moz, both reflecting the Evander Gold Mines acquisition completed in February 2013.
Sales
increased by 70.8% to £84.4m, EBIT increased by 34.9% to £23.2m and EPS by
11.8% to 0.95p.
These results clearly demonstrate the quality of the management - continuing to produce good results from the original operation, delivering on the Evander acquisition, whilst concurrently commissioning the Barberton Tailings Retreatment Plant on schedule and to budget that contributed 11,603ozs of gold in the period.
Free cash flow was strong generating £13.6m, as operating cash flow increased by £13.2m to £22.3m.
PAF is currently rated at a prospective 8.5x 2014 earnings, which places them on about a 30% discount to their sector, while having one of the top dividend yields.
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