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TAKE PROFITS Pan African Resources (PAF)

Close Pan African Resources (PAF) at market (48.95p)

We believe the time is right to close our position in Pan African Resources. The stock has surged back to life during the last two years following gold’s resurgence – taking our position into a triple-digit profit.

Whilst the rationale behind gold’s bull run remains intact, we believe the time is right to crystallise our gains for several reasons. First, Pan African’s latest trading update revealed a sharp fall in headline earnings, driven by lower production volumes and the costly hedge structure that capped its realised gold price. Although the outlook for H2 is more promising, with new projects ramping up and the hedge rolling off, much of that upside now appears priced in.

We also note that the share price has rallied strongly back to prior resistance levels, suggesting a natural point to take profits. Given the macro backdrop remains uncertain, and with operational execution still key to delivering on the growth pipeline, we prefer to step aside for now and reassess on any future weakness.

Profit = 123%

PAF Daily Candle Chart