Pan African gold production ahead of its guidance
PAN AFRICAN Resources plc said yesterday that it expected a reduction in production costs following this year’s discontinuation of underground operations at Evander Mines.
The company said gold production for the year to June 30 was 160 421 ounces, ahead of the company’s production guidance of between 157 000 and 160 000 ounces. The company’s production guidance for the current financial year is 170 000 ounces.
Evander Mines’ underground operations ceased earlier this year, resulting in the retrenchment of approximately 1 700 employees at a cost of about R160 million.
When the company announced the decision to discontinue with the Evander underground operations earlier this year, chief executive Cobus Loots said the company’s remaining production ounces would be low-cost and cash-flow positive, “which will ensure the sustainability and profitability of the group in the prevailing low rand gold price environment”.
Pan African said Barberton Mines production for the year was 90 628 ounces and was within the production guidance of between 90 000 ounces and 91 000 ounces.
The company said in the second half of the year, Barberton Mines produced 50 017 ounces of gold, a 23 percent increase on its first half production. At 69 793 ounces, Evander Mines also exceeded production guidance of between 67 000 ounces and 69 000 ounces.
“The 2018 financial year was extremely challenging for the group, both financially and operationally,” said Loots yesterday. “However, during the past six months, we have addressed key deliverables that were critical to the future sustainability of Pan African Resources. We are now re-positioned as a lower-cost, longlife gold miner, consistent with stakeholder expectations.”
Pan African said the construction of the Elikhulu tailings re-treatment plant in Evander, Mpumalanga, was on track for first production next month.
The company began the construction of its R1.7 billion Elikhulu tailings retreatment project on August 25 last year. The plant is expected to produce an average of 50 000 ounces of gold per year for the next 13 years.
“The construction team are now entering the commissioning phases in anticipation of a two-month ramp-up period to full production,” Pan African said. The project was expected to produce approximately 55 000 ounces of gold, at between $650 (R8 753) and $700 per ounce.
Pan African said the Royal Sheba ore body at Barberton Mines had the potential to deliver about 30 000 ounces per year.
Pan African shares on the JSE yesterday closed 1.47 percent higher at R1.38.