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Pan African reiterates support for government measures, as lockdown in South Africa extended

Pan African has a strong track record of gold production in South Africa

Pan African Resources plc -

Pan African Resources plc (LON:PAF) has said it remains committed to “all government efforts to contain the spread of COVID-19”, following the announcement from President Cyril Ramaphosa on Thursday that the lockdown there due to the coronavirus (COVD-19) pandemic will be extended.

The plan now is to end the lockdown on April 30.

Nonetheless, the company said in a statement that it has obtained authorisation from the South African Department of Mineral Resources and Energy to conduct surface re-mining and processing activities on a reduced scale, subject to compliance with and adherence to all relevant regulations and applicable legislation.

This includes the group’s Elikhulu tailings retreatment plant and at its Barberton tailings retreatment plant, and limited underground mining operations at Barberton Mines.

The company’s surface operations are currently operating at approximately 70% of normal production capacity, but with a much-reduced workforce.

Operating with such a reduced workforce is possible, for a limited time, as a result of the highly automated nature of the surface operations. Barberton Mines is currently also able to produce the required minimum feed for its BIOX processing plant, thus ensuring the continued integrity of this system.

Of the company's total staff and contractor complement, only 26% (excluding security staff) are involved in rendering essential services at these operations.

Updated guidance for the 2020 financial year will be communicated to shareholders after the lockdown has terminated, and once the company is in a position to quantify the extent and duration of the operational disruptions during this time, it said.

The company has said that its “liquidity position remains robust”.

Credit approval from Rand Merchant Bank has been obtained to defer the last three tranches of the group's existing gold loan’s redemption, constituting 5,000 ounces (equivalent to U$7.8mln) until the first quarter of the 2021 financial year.

The company’s banking consortium has also confirmed its support, should further liquidity be required.

Quick facts: Pan African Resources plc

Price: 18.425 GBX

Market: AIM
Market Cap: £355.29 m

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