Pan African Resources (LON:PAF) has impressed City analysts with first results from the Evander gold mine in South Africa.
The gold miner reported third quarter production figures yesterday showing Evander’s gold output rose by 23% while Pan African’s other deep mine, Barberton, increased production by 19%. Evander was acquired at end February.
Canaccord said that combined production was 10% ahead of its forecasts due to higher recovered grades, with production the strongest of all quarters this financial year so far.
The broker added Pan African is now well on track to meet its forecast of 184,000oz in the current year as 77% of this target has been met already.
The fourth quarter will also see a grades boost with the miner indicating grades are expected to be 9.7 g/t for Barberton and 4.6 g/t for Evander.
Canaccord added that given the lower gold price environment, maintaining the stability of gold production and costs are key for the group to pay down vendor finance and to bed-in Evander.
The broker maintained its buy rating and target price of 20p/share.
House broker finnCap added that Evander mine had recovered from two relatively poor quarters to produce 25,592 ounces during the third quarter while Barberton’s sales of 25,881 ounces of gold were again a good result as it recovers from previous operating issues.
It has maintained a 31p price target. Shares today ticked up to 15.53p.