GOLD was expected to remain at “extremely attractive” levels during Pan African Resources’ 2026 financial year, said the firm’s CEO Cobus Loots who added that investment in gold mining shares was still “under-allocated”.
In a highly bullish commentary to the firm’s 2025 financial numers – in which the firm posted a record profit and final dividend declaration – Loots said an elevated gold price looked set to remain.
“The perceived safe-haven status of gold is likely to persist amid global geopolitical uncertainty and a shifting world order, with seemingly continued momentum for a reallocation towards alternatives to the US dollar as the global reserve currency, and increasing central bank gold reserves in many countries,” said Loots.
“Tariff turmoil and market volatility have exacerbated investor uncertainty, with inflationary fears also adding to the rationale to preserve purchasing power via holding real assets,” he added.
Goldman Sachs recently raised the possibility that gold had far yet to travel. A scenario where US Federal Reserve independence was damaged would likely lead to higher inflation, lower stock and long-dated bond prices and an erosion of the dollar’s reserve currency status,” said the bank’s co-head of global commodities research, Daan Struyven.
Goldman Sachs’ baseline forecast predicts gold will reach $4,000 per ounce by mid-2026. Struyven suggested a significant shift from dollar assets could drive prices much higher. “If 1% of the privately owned US Treasury market were to flow to gold, the gold price would rise to nearly $5,000 per troy ounce,” he said.
While not going this far, Loots said the gold market was at an extraordinary juncture, especially as in relative terms investment in gold shares and gold itself was probably under-allocated. “The investment case for gold bullion rests on the prudence of portfolio diversification,” he said. “Gold is under-owned and highly illiquid relative to potential capital market flows.”
“The continued general lack of interest in precious metals miners seems unwarranted, given this significant increase in margins,” said Loots who blamed this on the track record of the gold mining sector for misallocation and “operating volatility”.
In this context, gold shares would outperform the market. “Strong fundamentals suggest that mining stocks are likely to continue to outperform other S&P sectors, as they have over the past 12 months,” he said.
Pan African said on Monday that it planned to move its primary listing to London’s Main Market, a move aimed at attracting new investors as the stock would most likely to included in the FTSE 250 index.
Despite the record performances, Pan African still underperformed in the sense that hedging structures resulted in a lower average realised gold price – $2,735/oz, a one-third increase year-on-year – than average spot.
But the outlook for 2026 is extremely positive as hedging contracts are now fulfilled while gold production is forecast to be up to 100,000 ounces higher in the current financial year (275,000 to 292,000 oz) than the 196,527 oz achieved in 2025 (itself a one-third increase year-on-year).
This, coupled with unstinting interest in gold amid geopolitical and financial distress, as set the stage for another strong showing for Pan African.
Shares in the company have improved 117% year-to-date and 160% over the last year – easily outperforming the VanEck Gold Miners ETF (GDX). This was indicative though of the lack of inward investment in gold stocks, said Loots. The index has gained only 52% compared to a gold price lift of 85%, he said.
Expansion
The expected increase in Pan African’s gold production is a result of its R2.5bn Mintails expansion, gold dumps near Johannesburg which are expected to yield 50,000 oz in output during the current year. Production from Nobles, a gold miner in Australia which Pan African acquired through the $54.2m acquisition of Tennant Consolidated Mining Group in November last year will add another 50,000 oz.
“Australia presents a highly prospective environment for further growth,” said Loots. “We have found the Northern Territory Government to be very supportive of our business, and we look forward to expanding our operations in the next years,” he said.
In addition to this, Pan African was looking at adding milling capacity at Mintails which would double production again, by another 50,000 oz/year.
While the company would look to expand production in Australia, as well as the Mintails growth options, Pan African had all but abandoned new investment in Africa. This was owing to increased resource nationalism.
“Resource nationalism is surging, and gold miners are increasingly caught in the crosshairs of this geopolitical shift,” said Loots. “Pan African’s focus in terms of operations and production growth will therefore, in all likelihood, continue to be centred in South Africa, a jurisdiction where our operations have an approximate 140-year track record, and Australia, considered a Tier 1 jurisdiction globally,” he said.
In announcing its Australian investment in November, Pan African decided to shelve its exploration foray into Sudan, some two-and-a-half years after announcing a $7m drilling programme there.
