Pan African Resources upbeat as it finalises TCMG acquisition

The AIM-traded firm said the development, coupled with operational advancements, positioned the group for substantial growth in gold production.

For the financial year ending June 2025, Pan African projected gold production to increase by about 16%, reaching 215,000 ounces compared to 186,039 ounces in the prior year.

Production was expected to rise further in the 2026 financial year, with output estimated between 235,000 and 250,000 ounces, excluding contributions from TCMG’s Australian operations.

That growth would be underpinned by the ramp-up of the Mogale Tailings Retreatment (MTR) plant and improvements at the Evander Mines underground operations.

Pan African said its financial position was also strengthening, as it expected to become materially unhedged by February, allowing for the full benefit from prevailing spot gold prices.

At current price levels, the company anticipated being debt-free within 12 to 18 months.

Operationally, the Elikhulu Tailings Retreatment Plant was on track to exceed 52,000 ounces of production in 2025, following the completion of additional tailings dam phases ahead of schedule and below budget.

The Barberton Tailings Retreatment Plant had meanwhile extended its operational life by six and a half years, while the newly-commissioned MTR operation, which achieved its first gold pour in October, was forecast to deliver 33,000 ounces in its first full year of operation at an all-in sustaining cost of under $1,000 per ounce.

Plans were underway to increase the MTR plant’s annual production to 60,000 ounces through targeted capital investments.

Evander Mines had meanwhile resolved delays in the commissioning of its sub-vertical hoisting shaft, which was now fully operational.

Underground production at the site was expected to reach 38,000 ounces in the 2025 financial year, supported by enhanced mining flexibility and higher ore grades.

At Barberton Mines, high-grade areas at the Fairview Mine were set to contribute to an improved production profile in the second half of the financial year, with total underground output forecast at 73,000 ounces, up from 71,470 ounces in the prior year.

The company said it was also continuing to advance its sustainability initiatives, adding that the commissioning of an 8.75MW solar plant at Barberton Mines was generating significant cost savings while reducing carbon emissions.

Similarly, a water recycling plant at Evander Mines had achieved notable cost efficiencies and would double its capacity by 2026.

Rehabilitation efforts at the MTR operation were also progressing, with over 120 hectares restored to date.

“The performance of our MTR operation, completed ahead of schedule and under budget, has exceeded expectations, with a successful production ramp-up and the plant performing to specifications and at the same time maintaining an excellent safety record,” said chief executive officer Cobus Loots.

“In terms of our production base, the group is now well diversified with both high-grade underground mining and high-margin surface operations.

“We are also excited about our ability to further expand our surface business in the short term to the benefit of all stakeholders.”

Loots said the company expected a “much-improved performance” for the Evander Mines underground operations in the second half of the financial year, with the large investment in infrastructure and optimisation over recent years benefitting the high-grade operation for more than a decade into the future.

“We are poised to deliver a significant increase in gold production for the full financial year, and then again in 2026.

By March 2025 Pan African will also be largely unhedged, and at prevailing gold prices, the cashflow generation from our long-life portfolio of quality assets should allow for rapid de-gearing and flexibility in deploying capital on value-accretive growth and further sector-leading dividends to shareholders.”

At 1115 GMT, shares in Pan African Resources were up 0.65% at 38.65p.

Reporting by Josh White for Sharecast.com.