Pan African gold pro­duc­tion ahead of its guid­ance

Cape Times - - COMPANIES - Siseko Njobeni

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.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.