Pan African Resources PLC (AIM:PAF, OTCQX:PAFRY, JSE:PAN, OTCQX:PAFRF) has narrowed its gold production guidance for 2024 with output now expected to be at the upper end of the forecast.
Production would have exceeded the target, added the South African gold miner, but due to costs, it has stopped processing low-grade surface ore at its Evander Mines complex which had chipped in 2,500oz in the first half.
Sustainable costs for the current financial year are still expected to be between $1,325/oz to $1,350/oz, while production guidance for the 2025 financial year is for 215,000oz to 225,000oz.
Cobus Loots, chief executive, added: “ The robust production results, combined with record Rand gold prices, should see the group deliver an excellent financial performance for the year."
Pan African added that its Mintails (MTR) tailings project remains on track for commissioning in December this year, but the numbers have been upgraded to allow recent rises in the gold price, further boosted by the Rand movement, and operational forecasts.
Payback of the initial US$135 million has been almost halved to two years, while the NPV has trebled to US$183 million.
In addition, work on the Soweto cluster suggests pumping material to MTR can materially extend both economic lives.
“The addition of the 110 million tonnes Soweto Cluster Mineral Resource has the potential to increase MTR production to approximately 60koz/year over a 21-year life-of-mine”, said Pan African.
An updated PFS suggests the pre-tax value (NPV) of the combined Mogale and Soweto Cluster is now US$283 million, an increase of US$96 million on Mogale's updated standalone financial model.
Loots added: “Our MTR project remains on schedule and on budget, and we look forward to commissioning it later in 2024. We have now demonstrated that the addition of the Soweto Cluster resources further improves the economic attractiveness of this world-class project."