Pan African Resources plc (LON:PAF) has announced that Barberton Mines Proprietary Limited has successfully concluded a three-year wage agreement with the National Union of Mineworker and the United Association of South Africa.
The AIM-listed firm said the agreement provides for an average annual wage increase of approximately 6.5% and 5.5% for NUM and UASA members, respectively, over the three years.
The group pointed out that negotiations were successfully concluded with no industrial action or work stoppages.
It said NUM and UASA represent the majority of employees at Barberton Mines.
The announcement comes a day after Pan African Resources revealed that it has more than doubled the mineral resource estimate at its Royal Sheba gold project in South Africa after results from the latest round of drilling “exceeded expectations”.
The miner now thinks the orebody is host to 0.9mln ounces of gold – a 150% increase on its previous estimate of 0.36mln ounces.
Drilling has suggested that around 0.35mln ounces of the precious metal are near to the surface and are conducive to open pit mining.
Peel Hunt rates ‘buy’
In a note to clients published this morning, analysts at City broker Peel Hunt raised their rating for Pan African Resources to ‘buy’ from under review’ with a target price of 16p.
They said: “With a greater understanding of the assets following site visits to both Barberton and Evander/Elikhulu earlier this year, we have shifted the base case for the company to a smaller but more profitable gold producer.”
Pan African Resources shares closed trade on Thursday at 7.82p.