Pan African Resources - EPS and valuation upgrades

Pan African Resources' (PAF's) interim production update for H126 revealed a 51% increase in gold production to 128.3koz (with a further c 19%, or 24.9koz, increase anticipated in H226 - see Exhibit 1), a 67% reduction in net debt to US$49.9m and a proposed (maiden) interim dividend of ZAR0.12 per share. All-in sustaining costs (AISC) of US$1,825-1,875/oz in H126 were above erstwhile guidance of US$1,525-1,575/oz for FY26. However, much of the increase could be attributed to the appreciation of the rand against the US dollar from the ZAR18.50/US$ rate originally assumed to ZAR17.37/US$ during H126 and ZAR16.0266/US$ currently. With the continuing strength in the gold price, we have upgraded both our FY26 EPS forecast (see Exhibit 4) and our valuation materially.

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