JOHANNESBURG (miningweekly.com) – Precious metals miner Pan African Resources expects its earnings a share for the six months ended December 31 to be between 23% and 43% higher than the 12.43c it reported in the prior comparable period.
Further, its headline earnings a share were also expected to rise by between 21% and 41%.
The company explained that its profits was significantly impacted by the PAR Gold Proprietary transaction, which resulted in the weighted average number of shares in issue reducing by 17.7% year-on-year.
The Uitkomst colliery, which it acquired in March 2016, also performed well during the period under review, contributing about 8.5% of the group’s earnings.
“If the current favourable coal price environment continues, the payback period for this acquisition is expected to be less than the four years previously forecast,” Pan African.
Meanwhile, it noted that its Barberton Mines had entered into a short-term strategic hedge in July 2015, when the prevailing spot gold price was R440 000/kg, to protect its cash flows and the group’s yearly dividend against severe adverse movements in the rand gold price.
During the current reporting period, the group recorded a pre-tax mark-to-market fair value gain of R90-million on the cost collar, owing to a reduction in the gold price from R625 000/kg as at June 30, 2016, to R505 000/kg as at December 31.