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Pan African Resources looks to build on strong momentum and production growth

“We continue to assess the optionality of our portfolio and are looking to build upon this year’s momentum to drive further growth," said CEO Cobus Loots

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PAF targets 185,000 ounces this year, after beating 2019's expectations with 172,442 ounces

Pan African Resources plc (LON:PAF) has told investors it is assessing options to build on the momentum achieved in the past year.

Ahead of results for the twelve months ended 30 June 2019, the company pointed out that through the year it has emerged as a safe, low-cost and long-life gold producer.

WATCH: Pan African reports pleasing performance as production is boosted

Significantly, it highlighted that gold output exceeded full year production guidance which was set at 70,000 ounces. Production rose by 7.5% to 172,442 ounces, or 54% when considered in terms of continuing operations.

“This has been delivered through the cessation of the high cost underground mining at Evander Mines, the successful commissioning of the Elikhulu tailings retreatment plant, and Barberton Mines achieving a significant increase in production,” said Cobus Loots, PAF chief executive.

“Critically, Barberton Mines achieved a historical milestone of 2 million fatality free shifts during June 2019 and we commend the team for this safety achievement.”

Loots added: “We continue to assess the optionality of our portfolio and are looking to build upon this year’s momentum to drive further growth. Evander’s 8 Shaft Pillar mining is expected to contribute an additional 20,000oz to 30,000oz per annum for the next three years.

“The group is currently reviewing the merits of expediting the Egoli project and is assessing funding options.”

Looking to the new financial year, PAF set its production guidance at around 185,000 ounces.

Operations results

PAF noted that the Barberton mines yielded 99,363 ounces over the last year, up from 90,629 ounces. Underground and surface mining operations at Barberton provided 75,356 ounces and 24,007 ounces came from tailings retreatment.

Evander contributed some 26,878 ounces. The Elikhulu tailings retreatment plant produced some 46,201 ounces.

Meanwhile, the company noted that it has recently experienced a number of lost production days due to its roadways being blocked by protestors.

Police support amid protests

“These protests are unrelated to normal industrial action and are initiated and supported by politicians and criminals who believe that extortion by means of violence is a legitimate social objective,” the company said.

“The mine has been supported by the South African Police’s Public Order Policing Division to control these protests, protect Pan African’s employees and preserve its assets.

“Whilst Pan African is cognisant of the levels of unemployment in South Africa and the resultant social impact flowing therefrom, these actions will only exacerbate the country’s economic problems and further disincentivises investment in the mining sector.

“Pan African will take the appropriate action to protect its employees and assets in the interest of all its stakeholders, supported by the South African law enforcement authorities.”

PAF noted that interdicts have been served and further criminal and civil actions will follow against certain individuals and organisations.

Quick facts: Pan African Resources plc

Price: 11.26 GBX

AIM:PAF
Market: AIM
Market Cap: £217.13 m
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