PAN African Resources yesterday reported that it delivered an excellent performance after achieving a record gold production above 108 000 ounces for the six months to end-December, exceeding its previous guidance.
The JSE and London Stock Exchange-listed group posted a 13.3 percent increase in earnings, despite average gold prices weakening by about 10 percent in rand terms.
Pan African’s chief executive, Cobus Loots, said the Evander underground mine in Mpumalanga had delivered a stellar performance during the current reporting period, demonstrating the potential of the operation.
“Elevated grades and improved mining rates, as a result of improved face availability, increased production from the pillar and surface sources by 72.5 percent to 33 068 ounces for the period,” Loots said.
According to Loots, gold production from its underground and tailings retreatment operation in Barberton Mines produced 49 117 ounces of gold for the period, and was on track to achieve full-year production guidance of 100 000 ounces.
“We are expecting an improved performance from the Elikhulu Tailings Retreatment Plant during the second half of the financial year, where production was adversely impacted as a result of inclement weather conditions experienced during November and December 2021,” said Loots.
At Barberton Mines’ Royal Sheba project, development work was ongoing. Project Dibanisa, which effectively connects the underground workings of the Fairview and Sheba Mines, is also progressing on schedule and will reduce the operational cost of underground operations, the company said.
Loots said the company was on track to produce about 200 000 ounces of gold for the financial year ending June 30, 2022 in line with its increased production guidance.
The reduction of its net senior debt to $23.9 million (R360.7m) represented a 60.1 percent decrease relative to the outstanding net senior debt on December 31, 2020 notwithstanding the payment of a record final rand dividend for the June 2021 financial year.
Looking ahead, Pan African Resources said the 9.975MW solar photovoltaic (PV) renewable energy plant at Evander Mines was on track to be commissioned in March 2022, following minor delays due to port disruptions and inclement weather.
“This plant, which will be delivered on budget, will be one of the first of its kind in the South African mining sector and demonstrates our commitment to sustainable energy solutions, with the benefits of cost savings and certainty of power supply,” the company said.
Last year, the group announced the conditional acquisition of one of the last remaining large-scale gold tailings resources available in South Africa; the Blyvoor Gold’s tailings storage facility (TSF), Blyvoor assets.
“This acquisition has the potential of further building on the group’s track record of successfully bringing tailings retreatment operations to fruition. An independent fatal flaw assessment and gap analysis has commenced on the Blyvoor assets, with this study expected to be completed by April 2022,” Loots said.
The share by 5pm was a 2.79 percent higher at R4.05.