Solid first half for Pan African Resources

Pan African Resources reported a quality start to the year on Tuesday, with production and earnings rising substantially in the six months to 31 December.

The AIM-traded company said group earnings increased by 129.4% in the period to ZAR 227.6m. In sterling terms, Pan African reported earnings increasing 98.2% to £10.9m.

Group revenue increased by 29.4% to ZAR 1.58bn (£74m). Total gold sales increased by 17.4% to 101,797 ounces.

Pan African said its effective gold price in rand increased by 11.7% to ZAR 485,215 per kilogram, equivalent to $910 per ounce. This was due to improved gold production and lower expansionary capital.

Its all-in sustaining cost decreased to ZAR 396,819 per kilogram, or $908 per ounce.

"We delivered important operational improvements at Evander Mines, with gold sales and revenue increasing significantly. The Evander Mines Tailing Retreatment Plant has assisted our production growth and continued focus on low-cost, high-margin gold ounces," said Pan African Resources CEO Cobus Loots.

"The performance in this period is a testament to our quality assets and dedicated workforce and management. The group is well positioned to produce approximately 200,000 ounces and 9,000 ounces of gold and platinum group elements respectively, over the full year period," he added.

Pan African Resources also pointed to a substantial improvement in net debt to ZAR 345.8m, from ZAR 458.6m in December 2014.

The group also reported no fatalities in the period, and said it was well-positioned to sustain attractive final dividend payments.