Pan African ups guidance ahead of production at Elikhulu plant

Precious metals producer Pan African Resources issued updated guidance after kicking off production at its Elikhulu tailings retreatment plant in South Africa, with the firm expecting the ramp up to full production of around 55,000 ounces per year to take no longer than two months.

Construction at the South African plant Evander, Mpumalanga was said to be progressing ahead of schedule, with first gold expected in August 2018 at an "all-in sustaining cost of production" of below $650 per ounce.

Separately, at its Barberton Mines asset, Pan African successfully increased its average head grade for the complex, which includes the Fairview, Sheba and Consort mines, rise from an average of 8.7 grams per tonne in the six months ended 31 December to 11.5 grams per tonne during the February 2018 production month.

The AIM-listed outfit said the 32% increase in head grade was predominantly a result of "mining high-grade ore at the 272 platform since January 2018."

Elsewhere, construction of a regrind mill at its BTRP project was proceeding according to schedule, when commissioning begins at the end of April, the regrind mill was expected to increase production to approximately 21,000 ounces per year.

In conjunction with the Evander plant, Barberton and BTRP were expected to produce more than 70,000 ounces per year for Pan African.

Pan African's chief executive, Cobus Loots, said, "After a challenging period at Barberton Mines we have successfully dealt with the key underground challenges at Fairview's 11-block and we are on track to re-establish BTRP's production profile at approximately 21,000 ounces per annum."

"Mining over the past two months at the 272 platform and the development into the 358 platform confirms the geological continuity of Fairview’s 11-block high-grade orebody. These developments, along with progress at the BTRP and Elikhulu, provide Pan African with far greater certainty of high-quality gold ounce production,” he added.

As of 0840 GMT, shares had picked up 2.97% to 7.34p.