Sign up United Kingdom
Proactive Investors - Run By Investors For Investors

Pan African on track to produce between 177,000 and 181,000 ounces of gold this year

Pan African now is moving on from operational issues, with production at Barberton set to rise significantly this year
Pan African on track to produce between 177,000 and 181,000 ounces of gold this year
Gold production should come in at between 177,000 and 181,000 ounces this year

Pan African Resources PLC (LON:PAF) listed on AIM more than 15 years ago with a small gold project in Mozambique.

The company then went on an aggressive acquisition spree in South Africa, transforming itself into an established mid-tier miner with production from two major projects, Evander and the Barbeton Mines, regularly amounting to upwards of 160,000 ounces per year.

Total production for the six months to 31 December 2017 amounted to 85,282 ounces, and the company is guiding for full year production of between 177,000 and 181,000 ounces.

Barberton Mines on track to produce 50,000 ounces of gold in the second half of 2018

Production from Barberton is expected to increase by 23% during the second half of 2018, as the company moves on from issues relating to the underground grade which hampered development in the first half.

First half production was also hit by industrial action and disruption from pressure groups, as well as a technical issue with the ore at the Barberton Tailings Retreatment project.

All those issues have now been addressed.

Evander returns to profitability

After remedial action was taken to address critical shaft infrastructure, Evander has returned to profitability, and production has risen by 5.4%. Gold sold rose to 32,734 ounces during the first half of the current year. However, at this stage, Pan African is being cautious about setting precise production guidance for this mine.

Gold production from Evander Mines will be dependent on the outcome of the labour consultation process and the review of the 8-shaft operations. As it stands, Pan African is prioritising lower cost, high margin ounces in the current weak rand gold price environment. A reduction in non-paying gold production will therefore benefit group margins and sustainable cash flows.  

Expansion projects underway

Construction of the Elikhulu tailings retreatment plant remains ahead of schedule, with first gold production expected in August 2018. A feasibility study has confirmed the viability of processing tailings from the Evander Retreatment plant.

Meanwhile, the company has booked a 100% increase in resources at Barberton’s Royal Sheba Project to 720,000 ounces, and a re-assessment of the feasibility of Evander Mine’s Egoli project is in progress.

Objective is to deliver low-cost high margin, sustainable gold, says chief executive

“The past 12 months have been a watershed period, during which we reassessed the sustainability of all our operations and dealt with the issues causing operational disruptions,” said chief executive Coobus Loots. 

“While we still have some work to do, we are confident our operations are being positioned to deliver into our objective of mining relatively low-cost, high-margin and sustainable gold ounces. In light of the prevailing low ZAR gold price, the group is reviewing its cost base and the strategic merits of our portfolio. We expect to deliver improved production results and cost savings in the next reporting period.”

View full PAF profile View Profile

Pan African Resources plc Timeline

Related Articles

gold mineralisation
July 19 2018
Chief executive Gervaise Heddle believes the three projects, all located in Western Australia, have the potential to host “multi-million ounce deposits”
1517846055_Cradle-Mine.jpg
Mon
Cradle Arc is ramping up copper production at its Mowana project, and further expansion is on the cards
Picture of green hills in Serbia
July 20 2018
Taor held two exploration licences totalling around 100 sq km adjacent to the Suva Ruda licence

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use