Pan African Resources production improves in first half

Pan African Resources reported a 5.9% improvement in group gold production in its first half on Friday, to 98,386 ounces.

The AIM-traded company said gold production from Barberton Mines for the six months ended 31 December totalled 52,354 ounces, while Elikhulu and Evander Mines produced 26,863 ounces and 19,169 ounces, respectively.

Operations had continued to implement and maintain stringent policies and protocols to mitigate the effects of the ongoing Covid-19 pandemic on employees and production, the board said.

Environmental, social and governance projects, including the 10MW renewable energy solar photovoltaic plant at Evander Mines and large-scale agriculture projects in Barberton Mines, were said to be on track for commissioning in the third quarter.0

Group net debt narrowed by 47.3% to $65.2m, with Pan African saying it was on track to deliver its full-year production guidance of about 190,000 ounces.

Pan African CEO commented:

“Pan African’s financial results and increase in gold production for the first six months of the year demonstrates a commendable operational and safety performance, amidst the challenges of the ongoing Covid-19 pandemic,” said chief executive officer Cobus Loots.

“Barberton Mine’s gold production of 52,354 ounces for the current reporting period deserves recognition and demonstrates the excellent progress that this flagship asset and its operating team have made in reserve development and infrastructure optimisation.

“Group net debt decreased by 47.3% to $65.2m relative to the six months ended 31 December 2019, notwithstanding a record final rand dividend distribution for the 2020 financial year, paid in December.”

Loots said the company was expecting operations at the Evander Mines’ 8 Shaft pillar to deliver a “much-improved” performance during the rest of the 2021 financial year, as the pillar mining activities gathered momentum.

“We have now commenced with early preparation work and limited capital expenditure for the execution phase of the Egoli project.

“We expect to finalise the debt funding package within the first quarter of the 2021 calendar year.

“This organic growth project will contribute considerably to our future gold production.”

The construction of the solar photovoltaic plant at Evander Mines would begin during the first quarter of the 2021 calendar year, Loots said, with first power expected to be generated during the third quarter.

“This plant will be one of the first of its kind in the South African mining sector and demonstrates our commitment to environmental, social and governance initiatives.

“In conjunction with several other projects, it also underpins the Group’s profitability and sustainability.

“The group remains on track to produce 190,000 oz of gold for the financial year ending 30 June 2021, and we are committed to continue creating value for our stakeholders by positioning Pan African as a sustainable, safe, high-margin and long-life gold producer.”

At 0934 GMT, shares in Pan African Resources were flat at 24.5p.