Pan African Resources PLC (AIM:PAF, OTCQX:PAFRY, JSE:PAN)CEO Cobus Loots talked with Proactive about the company’s first-half results, recent production challenges, and exciting growth plans. Despite a temporary dip in output due to commissioning delays at the Evander underground mine, Loots said the company expects a stronger second half, supported by the high gold price and increased production from its Mogale Tailings Retreatment (MTR) project.
Loots highlighted that MTR, which was delivered ahead of schedule and below budget, is set to produce around 50,000oz annually for 20 years at an all-in sustaining cost of $1,000. He also noted the potential for increasing MTR production to 60,000oz per year through cost-effective improvements.
Discussing the Tennant Consolidated Mining (TCM) acquisition in Australia, Loots confirmed that production is set to begin in April, with output guidance of 48,000-60,000oz next year. He emphasized that the majority of Pan African’s production will come from low-cost surface operations.
With the company maintaining its 2025 production guidance at 215,000oz and forecasting an increase to up to 308,000oz in 2026, Loots expressed confidence in the company’s future.
Proactive: I'm joined by Pan African Resources CEO Cobus Loots. Cobus, it’s very good to speak with you again. You’re out with your first-half results, and although you reported a dip in production due to delays at your Evander underground operations, that should more than even out in the second half. You’ve also had the benefit of a very strong gold price.
Cobus Loots: The performance of the Evander underground was disappointing due to a delay in the commissioning of a sub-vertical shaft. That shaft is now commissioned, and we are ramping up. So, as you say, we expect a much better performance in the second half.
However, the reduction in output was compensated for by early production from our Mogale Tailings Retreatment (MTR) project, which was delivered ahead of schedule and below budget in October last year. That’s going to be a fantastic asset for our group. We expect MTR to produce for 20 years at around 50,000oz per year or more at an all-in sustaining cost of $1,000. That positions us well for the second half of the year.
Proactive: You mentioned in the RNS that you’re conducting studies to see how you can increase production at MTR. Can you tell us more about that?
Cobus Loots: In the short term, we think we can increase production from 50,000oz to 60,000oz per year through simple and cost-effective initiatives. By September, we will complete a feasibility study into a standalone new operation to re-mine our Soweto cluster. If we proceed, we could almost double the size of current production from that part of the world.
Proactive: Investors were particularly interested in your plans for Tennant Consolidated Mining (TCM) in Australia following the acquisition in December. Are you on track for production by mid-year?
Cobus Loots: Certainly. It was very exciting for us to conclude that transaction in December. It’s not often that you can do a deal and start producing within six months in a tier-one jurisdiction like the Northern Territory in Australia. Exciting times for us.
The plant is nearly built, and we expect to commence production in April, ahead of schedule and within budget. A significant ramp-up is planned for next year, with guidance from Australia between 48,000oz and 60,000oz. That means over 60% of our production will come from low-cost surface operations.
Proactive: You’ve said that Tennant will make up about 20% of current production, but there’s a lot of scope for further growth.
Cobus Loots: Most definitely. We are optimizing our mine plans. The current life of mine is eight years, but we see significant potential to extend that. At current gold prices, cash flows are very compelling.
Proactive: How are your other operations performing?
Cobus Loots: Our surface operations continue to perform well. Elikhulu is delivering consistently, and MTR is ramping up. The Barberton Tailings Retreatment Plant (BTRP) remains the lowest-cost producer in the group.
At Evander, the sub-vertical shaft is now commissioned, and we are ramping up production. Barberton’s Fairview operation will continue to contribute positively, and we are optimizing our last mine at Barberton over the coming months. Overall, our portfolio is in good shape.
Proactive: You mentioned the high gold price—$2,900. That must be great for your South African and Australian operations?
Cobus Loots: It’s excellent. In this set of results, we still had a hedge in place to help fund MTR’s construction. The opportunity cost of that hedge over the last six months was $18 million. That hedge rolls off completely at the end of February, so our investors will have full exposure to the dollar and rand gold price.
Proactive: Despite the first-half setback at Evander, you’re maintaining your full-year production guidance of 215,000oz. How is the second half looking?
Cobus Loots: We wouldn’t be putting out that guidance if we weren’t confident. Importantly, there is a significant ramp-up in FY26, with a full year of production from both MTR and TCMG. Our guidance for the next financial year is between 270,000oz and 308,000oz—a very material increase.
Proactive: I hope you’ll keep us posted on your progress. Thanks for your time today.