Pan African Resources to benefit from prevailing record gold prices
Pan African advises that its earnings are expected to increase between 68% and 78%, respectively. Headline earnings per share (HEPS) for the current reporting period is expected to be between US 5.68 cents per share and US 6.10 cents per share, compared to HEPS of US 4.15 cents per share for the corresponding reporting period, an increase of between 37% and 47%, respectively.
The increase in earnings for the current reporting period, relative to the corresponding reporting period, is primarily attributable to an increase in revenue of 44.5%, as a result of the following:
- an increase of 35.7% in the average US$ gold price received to US$2,735/oz (2024: US$2,015); and
- an increase in gold sold of 6.5% to 196,926oz (2024: 184,885oz).
In the current reporting period, 105,004 oz of gold sales were subject to hedging transactions, and did not benefit fully from prevailing gold prices. The synthetic forward transaction, entered into to fund a portion of the MTR operation construction, resulted in an opportunity cost of US$26.2 million, and the zero cost collars resulted in losses of US$5.8 million, negatively impacting profits by approximately 23%. The Group is fully unhedged from 1 July 2025 and as a result will benefit from prevailing record gold prices.
Group production is further expected to increase for the year ending 30 June 2026 to between 275,000oz and 292,000oz, largely attributable to the contribution from the Group’s new MTR operation and Tennant Mines.
