Pan African Resources PLC (AIM:PAF, OTCQX:PAFRY, JSE:PAN) earlier this week reported record results for the year to June, with production, earnings and profits all reaching new highs. The company said it also proposed a record dividend for approval at its upcoming AGM.
Chief executive Cobus Loots told the Proactive studio that the strong performance was supported by higher gold production alongside favourable market conditions. He said the company produced a record number of ounces in the second half of the year and achieved record profits.
Looking ahead, Pan African outlined a significant increase in output for full year 2026.
Let's take a closer look at what was said during the interview.
Proactive: Cobus, very good to speak with you. You reported a strong performance for the year to June. And I suppose that record gold price must have been a big tailwind for the company?
Cobus Loots: Most definitely. The gold price has helped us, but we also produced more gold. Overall, it was a strong set of results with a number of records. We produced a record number of ounces in the second half of the financial year, record earnings and profits, and we are proposing a record dividend for approval at the upcoming AGM. So it has been a good time for Pan African.
Proactive: After lifting production by close to 6% last year, you’ve also announced a big step up for full year 2026. What are the main drivers behind this? You’ve got your Mogale Tailings Retreatment (MTR) plants, Tennant Mines and Evander Mines?
Cobus Loots: Mogale, or MTR, is firing on all cylinders. We are expanding that plant, and the expansion will be completed around January or February next year. That means Mogale goes up to 60,000 ounces, compared with guidance of about 54,000 ounces this year versus 30,000 in the year just passed. That’s a big boost, as is Tennant Mines, which will see its first full year of production. Very exciting. Evander underground will also produce more ounces. We are comfortable with a significant increase in production in the year ahead.
Proactive: Your all-in sustaining costs rose to $1,600 an ounce this year. What steps are you putting in place to bring them down to the guidance range for full year 2026?
Cobus Loots: If we produce from these lower-cost assets, that automatically reduces our all-in sustaining costs. We are very cost conscious as a group, but we will continue to spend capital for the long-term benefit of our assets and ultimately our shareholders. Globally, costs have risen, with the sector average around $1,700 per ounce. We are competitive, and 85% of our portfolio last year produced at $1,425 per ounce, which is very attractive.
Proactive: You have proposed a record dividend and a 200 million rand share buyback. How are you balancing shareholder returns with funding growth projects?
Cobus Loots: We are in a fortunate position because of the gold price. Despite the record dividend and continued capital spending on growth, we expect to be ungeared from a net perspective before the end of the 2026 financial year. That’s a good position for us. In the past year, we had hedges outstanding to fund the construction of MTR, but from 1 July we are completely unhedged and able to benefit from the excellent gold price.
Proactive: You’ve also announced plans to transfer your listing from AIM to the main market of the London Stock Exchange. What’s the rationale behind that?
Cobus Loots: The group has grown materially from a production and profit perspective. AIM has been a very good market for us, and the UK has supported us well. It seems to be the natural next step. There are not many gold counters listed in the UK that provide exposure to investors, and we look forward to meeting some of that demand.
Proactive: With gold at current record levels, how does this affect your margins, capital decisions, and your outlook for 2026?
Cobus Loots: We continue to be disciplined and focused on delivery. Nothing will change. The gold price is excellent, but we are not planning around this level. We can deliver attractive earnings and returns at much lower prices, but long may it last.
Proactive: Cobus, I hope you’ll continue to keep us updated with your progress. Thank you very much for speaking with us today.