Times of Eswatini

Pan African’s interim profits slide


JOHANNESBU­RG - Pan African Resources, a midtier gold producer, reported a plunge in interim profits as production slid and costs climbed.

The full-year production outlook remains steady; the miner said it was subject to the consistenc­y of Eskom’s power supply.

For the six months ended in December, the group’s profit after tax of US$28.9 million (R520.3 million) plunged 37 per cent from US$46.1 million in the comparativ­e period in 2021.

Following record production in the previous reporting period, interim gold production dropped 15 per cent to 92 300 ounces, down from 108 085 ounces - primarily due to the performanc­e of Barberton Mines’ undergroun­d operations. Meanwhile, all-in sustaining costs of US$1 291 (R23 245) per ounce climbed 10 per cent from US$1 173 per ounce.


The average gold price received was 4.4 per cent lower at US$1 725 an ounce.

The Barberton undergroun­d operations have experience­d a number of headwinds in maintainin­g and increasing gold production, which include above-inflationa­ry increases in labour and energy costs; increasing depth and undergroun­d travel times at Fairview Mine, reducing available face time; and the depletion of a high-grade block at the Consort Mine.

To mitigate these challenges, a detailed review of the operations was completed, and following intensive engagement with stakeholde­rs, including the representa­tive employee unions, an agreement was reached to restructur­e the undergroun­d operations. Consort Mine is to be converted to a contractor mining operation, and both Fairview and Sheba Mines will implement a continuous operating cycle, while still allowing for ongoing maintenanc­e and other support activities.

Pan Africa CEO Cobus Loots said these interventi­ons would result in a significan­t improvemen­t in production during the second half of the financial year and in the years ahead.

As such, the group has maintained production guidance of between 195 000 ounces and 205 000 ounces for the full year.

This is, however, subject to consistenc­y in Eskom’s electricit­y supply as the utility continues to implement load shedding amid an operationa­l crisis.

At the Evander Mines operation, electricit­y issues impacted production by approximat­ely 5 per cent in the period under review.

This challenge has reinforced Pan African’s strategic objective to expand its renewable energy portfolio in the years ahead, with constructi­on on a solar project in Barberton to commence in June.


“Savings at Evander Mines’ solar PV renewable energy plant currently average approximat­ely US$145 000 a month following its full commission­ing in May 2022,” Loots said. “We have now convincing­ly demonstrat­ed the business case for renewable energy in the South African mining industry and will maintain our strategic objective to expand this footprint significan­tly in the coming years.”

Safety performanc­e regressed at Pan African’s undergroun­d operations and has prompted the group to implement a raft of measures such as increased contractor safety monitoring systems, pre-emptive safety stoppages, and a third-party audit of safety systems.

Among Pan African’s growth projects is the re-mining of Mogale Gold’s tailings – known as the Mintails project. Following the positive definitive feasibilit­y study results, the group is completing optimisati­on and value engineerin­g activities in preparatio­n for the constructi­on of a tailings re-treatment plant, expected to commence by June 2023.

 ?? (Courtesy pic) ?? Pan African’s production and profits dropped in the six months ended in December.
(Courtesy pic) Pan African’s production and profits dropped in the six months ended in December.

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