Cobus Loots, chief executive of Pan African Resources PLC (AIM:PAF, OTCQX:PAFRY, JSE:PAN, OTCQX:PAFRF), talks through an important year at the South Africa-based gold miner.
While the very high dollar and Rand gold prices were clear tailwinds, Loots adds there were also several operational achievements and milestones.
Cobus Loots: We made our production guidance for the year, we made our cost guidance also. Very importantly, safety has improved even further.
And then we are very excited about the imminent commissioning of a Mintails operation on the wasteland of South Africa.
Proactive: So, surface tailings at Elikhulu and BTRP are performing well with an improvement in gold production at Barberton.
Cobus Loots: Certainly. Elikhulu and BTRP are some of the lowest-cost producers of gold in Africa at this point.
At Elikhulu, we're in a fortunate position where we still have almost ten years of life remaining.
And Elikhulu was a blueprint for what we're doing at Mintails. So, the surface operations performed very well.
Meanwhile, continuous operations at Barberton yielded some very successful results.
Proactive: How about the Mogale tailings retreatment projects?
Cobus Loots: Again, it’s a testament to benefiting from the ability to successfully execute and then operate these world-class projects.
It will require about $130 million of capital and total construction time will be in the order of 14 months.
We've scheduled the first gold pool for the beginning of October at Mintails, and steady-state operations during December of this year.
We are busy with our budgets, but currently, we still expect to be producing at circa $900, all in sustaining.
This operation is going to lower the group's all-in-sustaining cost of production and add some very good incremental cash flows.
Mintails can be operating for more than 20 years. So, that's a great result.
And if you look at all the ancillary benefits to our communities already,
Huge job creation in that part of the world, and then the environmental rehabilitation, which we are busy with at the moment, is making a very large positive difference in that area.
Proactive: You mentioned the commissioning of the ventilation shaft and hoisting system at Evander. Take us through the benefits you're going to see from that.
Cobus Loots: On the Evander underground, which is a long-life asset, it's an excellent quality ore body.
We've invested quite a large chunk of capital over the last three years or so, about $100 million.
It's gone into the operation to optimize and to ensure that we can produce profitably and safely in the years ahead.
The ventilation shaft will eliminate around five kilometres of underground conveyors with resultant efficiency improvements.
The project was somewhat delayed but we expect that shaft to be commissioned in the next month or so, and then will see those benefits start to come through.
Proactive: You've also been making progress with your renewable energy projects,
The projects at Fairview mine have been completed, including the solar photovoltaic generation plant.
And there's a feasibility study underway to expand the solar facilities at Evander and also looking at the Mogale tailings retreatment.
Cobus Loots: It’s an exciting time for us as far as renewables are concerned.
If you remember, we were the first South African miner to commission a large-scale utility plant at our Evander operation that was ten megawatts.
Barberton is near complete and we've actually just received word that we should be energized in the next couple of days.
So that's very exciting for us. It’s another nine megawatts.
And then, we are very much fast-tracking the studies on both Mogale and Evander's expansion.
So, I think in the next 18 to 24 months we should be able to double, at the very least, our own generation capacity as far as renewables are concerned.
We looking to enter into a couple of further agreements to make sure that we continue to expand that renewables footprint.
Proactive: What does that do to your cost profile going forward?
Cobus Loots: It will have quite a large cost benefit, particularly given the substantial cost increases from SA utility, Eskom.
So, in terms of the Barberton facility, initially, we estimate a cost saving of almost $2.5 million a year, which is quite attractive.
Proactive: And full year 2025. What does that hold in store for the company?
Cobus Loots: Continue to focus on producing safely and continue to optimize our existing operations.
We are very much looking forward to commissioning Mogale and all of the tailwinds that will bring.
And then hopefully, we continue to see a lot of enthusiasm in the gold market, which has been very attractive.
Certainly, our sense is that the gold price will remain strong.