Pan African Resources PLC (AIM:PAF, OTCQX:PAFRY, JSE:PAN, OTCQX:PAFRF) has reduced its production guidance for this year due to the ongoing grid power supply issues in South Africa.
Estimates for the twelve months to end June 2023 now are for approximately 175,000 ounces (oz) gold equivalent, compared to 195,000oz to 205,000oz previously, with outages by state power supplier Eskom responsible for the loss of 10,000oz.
Pan African added that the expected ramp-up production at its Barberton underground complex had also been slower than expected while Evander, also underground, had run into unexpected geological issues.
Production is expected to recover to between 178,000oz to 190,000oz in the year to June 2024 and rise again the following year as the Mintalls operation comes online.
Pan African said it is "aggressively" rolling out its renewable energy plans to mitigate the impact of the grid power supply problems.
Due to the lower production, costs have risen though this has been offset partially by a higher gold price and the weakness of the rand against the US dollar,
Net senior debt is still expected to decrease to between US$25mln to US$35mln at the June year-end, it added.
The gold miner noted that it also suffered a fatality at Evander in March due to a ground fall incident following one million accident-free shifts previously.
Cobus Loots, the company's chief executive, commented that Pan African was saddened by the death at Evander and was implementing further programmes to improve safety procedures.
He added he was disappointed with the production performance, but a turnaround at Barberton Mines is now evident, especially in the past two months, while he believed the miner is ahead of the field in reducing its dependence on Eskom.
Ground clearing at the Mintails project has also commenced, he said, in anticipation of the senior debt component of the funding package being closed by June 2023