Pan African reports rise in full-year gold production

Pan African Resources reported a 6.2% increase in gold production in a full-year update on Monday, achieving a total output of 186,039 ounces.

The AIM-traded firm said that growth aligned with its revised guidance, and marked a notable rise from the prior year’s 175,209 ounces.

It reported an average achieved gold price of $2,021 per ounce - the highest on record for the group.

Pan African said it saw significant improvements in safety metrics, with the total reportable injury frequency rate dropping to 5.47 per million man-hours, from 8.13 in 2023.

Additionally, the lost time injury frequency rate and reportable injury frequency rate improved to 1.62 and 0.70 per million man-hours, respectively.

At Barberton Mines, production rose to 71,470 ounces from 64,586, while at Evander Mines Underground it improved slightly to 40,869 ounces from 40,175 a year earlier.

At Elikhulu, production grew to 54,812 ounces from 50,573, while at the Barberton Tailings Retreatment Plant (BTRP), it slipped to 18,888 ounces from 19,875.

The group’s all-in sustaining costs (AISC) for the period were expected to be around $1,350 per ounce, reflecting an average exchange rate of ZAR 18.71 to the dollar.

On the project front, the board said the Mogale Tailings Retreatment project had made exceptional progress, with plant commissioning and first gold production anticipated ahead of schedule in October.

Steady-state production was expected by December, and the project was projected to be completed below budget.

The MTR was expected to produce around 60,000 ounces per year over a 21-year mine life at an all-in sustaining cost of less than $900 per ounce.

Pan African meanwhile said the construction of Fairview Mine’s 8.75MW solar photovoltaic plant was completed by the end of June, with final commissioning set for the coming weeks.

The plant was expected to supply 15% of Barberton Mines’ energy needs, resulting in annual electricity savings of about $2.4m.

Independent feasibility studies were also underway to expand Evander Mines’ solar facility and to establish a new solar plant at the Mogale Tailings Retreatment operation.

Net debt at the end of the period widened to $106.4m from $22m at the end of the 2023 financial year.

The board said the rise was primarily due to the $71.5m spent on the MTR Project, along with capital expenditures for Evander 8 Shaft and Elikhulu’s new tailings storage facility.

Additionally, $9.9m was invested in the Fairview solar plant.

The group's solar projects were financed through a $19.4m Green Loan facility, effective from June.

On the management front, group finance director Deon Louw announced his retirement effective 30 September, although he would continue as a consultant.

Marileen Kok, currently group financial manager, would succeed him, pending standard director due diligence.

Kok joined Pan African in January 2020, with extensive experience in financial reporting and corporate finance.

Pan African Resources reiterated its production guidance for the 2025 financial year at between 215,000 and 225,000 ounces, reflecting confidence in the ongoing operational improvements and project developments.

“We are pleased that the group has again delivered its production guidance, while further improving safety rates and maintaining its industry leading safety performance during the 2024 financial year,” said chief executive officer Cobus Loots.

“The surface tailings retreatment operations at Elikhulu and the BTRP performed exceptionally well, with some of the lowest all-in sustaining production costs in Southern Africa.

“The group is poised to deliver another world class tailings retreatment operation ahead of schedule and below budget in the coming months with the MTR Project.”

Loots said Barberton Mines saw a steady improvement in gold production, with planned optimisation initiatives to increase ore tonnes expected to further bolster gold production in the next financial year.

“Commissioning of the ventilation shaft hoisting system at Evander underground during the start of the 2025 financial year, will substantially improve efficiencies and reduce reliance on the cumbersome conveyor system currently in use, vastly improving this operation’s production profile and facilitate the 25-26 Level project’s development.

“We look forward to presenting our 2024 year-end financial results in September, and to provide further details on developments at our operations and exciting pipeline of growth projects that will significantly increase the Group’s total annual gold production in 2025.”

At 1106 BST, shares in Pan African Resources were up 0.53% at 28.65p.

Reporting by Josh White for Sharecast.com.