Pan African posts jump in first-half earnings

Pan African Resources reported a significant increase in net cash from operating activities in its interim results on Wednesday, soaring 134.5% to $27.2m year-on-year.

The AIM-traded firm said profits for the six months ended 31 December surged 46.7% to $42.4m, with headline earnings increasing 46.4% to $42.6m.

Earnings per share and headline earnings per share rose by 46.1% to 2.22 cents per share.

Despite a slight decrease in net dividend payments from $20m in 2022 to $18.3m in December, the dividend yield increased to 5.9% from 4.6% at the last traded price on 30 June.

The company said it maintained a healthy financial position, with net debt reaching $64.3m compared to $53.7m in the prior year period.

Gold production showed a commendable increase, reaching 98,458 ounces, a 6.7% rise compared to the previous reporting period.

Safety metrics also improved, with a notable decrease in the total recordable injury frequency rate to 6.13 per million man-hours.

Barberton Mines achieved a significant safety milestone, with four million fatality-free shifts in November.

The group said its surface operations reported no recordable injuries during the reporting period.

Despite inflationary pressures, production costs were effectively managed, leading to a reduction in all-in sustaining costs (AISC) per ounce to $1,287.

The group said its operations produced at an AISC per ounce of $1,149 per ounce, while tailings retreatment operations achieved an AISC of $894 per ounce.

Pan African said it anticipated further improvement in future AISC through renewable energy generation, water recycling, and other efficiency initiatives, as it reduced the AISC per ounce guidance range for the 2024 financial year to between $1,325 and $1,350 per ounce.

Pan African said it was committed to its growth projects, including the Mogale tailings retreatment (MTR) project, where steady-state production was expected by December to contribute 50,000 ounces annually over a 20-year life-of-mine.

Furthermore, environmental, social, and governance initiatives continued to be a priority for the company.

Construction of the Fairview Mine's 8.75MW solar plant was progressing, with commissioning expected in June.

“Pan African delivered an excellent safety, production and financial performance for the reporting period, which positions the group well to deliver on our production and cost guidance for the full financial year,” said chief executive officer Cobus Loots.

“We are deeply saddened by the fatality that occurred at Elikhulu after the reporting period, as outlined in the subsequent events section further in the announcement.

“We are well positioned to deliver on our operational and strategic objectives for the 2024 financial year, and if the current gold price tailwinds persist, shareholders can look forward to a continuation of the reporting period’s excellent financial performance for the full financial year.”

At 1040 GMT, shares in Pan African Resources were down 2.37% at 16.93p.

Reporting by Josh White for Sharecast.com.