Pan African Resources PLC (AIM:PAF, OTCQX:PAFRY, JSE:PAN, OTCQX:PAFRF) CEO Cobus Loots tells Proactive that tailwinds are building behind the gold miner helped by the record gold price.
Cobus Loots: The gold price definitely is a tailwind to this point. But it's quite important to note that for the year, we received a gold price of just under $2,100 per ounce. Gold prices really only started rallying towards March and later.
Currently, the gold price is at about $2,500, so that should bode well for the year ahead, especially as we plan to grow production quite materially with Mintails coming into the picture.
Proactive: Gold production for the year is up 6.2%, with some operational enhancements. Could you talk us through those?
Cobus Loots: Elikhulu performed excellently, with production up about 9%. Both tonnes and recoveries increased at Elikhulu.
The Fairview and Sheba operations at Barberton also did better after the implementation of continuous operations.
Proactive: All-in-sustaining costs were slightly above guidance, and you mentioned the delay in commissioning the Evander sub-vertical shaft. Is that something expected to come through this financial year?
Cobus Loots: Yes, it's a temporary setback. The Evander ore body is a great asset, and we've demonstrated over the years that it generates very attractive returns. We've invested heavily in this asset.
The sub-vertical shaft is expected to come online in the next few weeks, doubling our waste capacity out of Evander underground and providing more flexibility.
Proactive: Revenue is up 17%, profits are up over 30%, and you're rewarding shareholders with a dividend as well.
Cobus Loots: It's quite exciting to pay a large dividend in the same year that we are commissioning a major capital project like Mintails.
This is the largest single capital project we've undertaken as a group, which demonstrates the quality of our portfolio.
Proactive: You mentioned you're poised for the next phase of growth, particularly with the Mogale Tailings Retreatment project.
Cobus Loots: The Mogale Tailings Retreatment (MTR) project is scheduled for commissioning on October 3rd.
The site is currently a hive of activity, with more than a thousand people on-site.
It's going to be a fantastic project for Pan African. We acquired the asset for a limited consideration, and it now holds a recoverable gold reserve of 1.1 million ounces, which is exceptional.
Being able to execute these projects on budget and on schedule sets us apart.
Proactive: Cobus, you talked about the favourable gold price environment at the moment, at $2,500 per ounce. How are you positioned for 2025 to take advantage of that?
Cobus Loots: Our cost guidance is just below $1,400 per ounce, which compares very well with the rest of the sector.
With MTR ramping up production, we are gaining more exposure to the attractive gold price.