JOHANNESBURG (miningweekly.com) – There is still another 100 years of gold mining ahead in Barberton, says Pan African Resources CEO Jan Nelson.
The London Aim and JSE-listed precious metals company, which has three gold mines in Barberton where the first traces of alluvial gold were found in 1874, reported a pre-tax, depreciation and amortisation earnings increase of 51% to £12,95-million in the six months to December 31, up from £8,60-million in the comparable period in 2009.
Pan African owns the Fairview, Sheba and New Consort gold mines in Barberton, together with black economic empowerment partner, Shanduka.
“The three mines we own have produced over 75% of all the gold that has been mined in Barberton for 100 years, which totals close to 7,5-million ounces.
“In every geological terrain there is a hot spot and the three mines that we own fortunately sit in that hot spot,” Nelson tells Mining Weekly Online.
Profit margins increased by 34% to R119 000/kg in the period, compared with R88 000/kg in the same period in 2009, despite of inflationary pressures, abnormal security costs to combat illegal mining and a strike.
In a results presentation on Tuesday, the company flashed up drilling results, which showed grades as high as 224 g/t and 220 g/t in the New Consort mine in particular.
Pan African, which is confident of producing 100 000 oz of gold this financial year, sold 1,5% more ounces to 46 655 oz in the period.
The head grade remained sustainable at 10,55g/t compared with 10,11g/t in the comparable 2009 period.
Total cash cost were R176 199/kg, up from R164 697/kg in 2009.
Nelson expects the company’s Barberton operations to produce at a rate of 125 000 oz a year in five years.
“We’ve got to show that we can grow Barberton, but we also have to be realistic and, with current infrastructure, 125 000 oz/y is probably the maximum we could push out of Barberton,” Nelson says.
A new tailings facility has been established, which presents Pan African with the opportunity to drill the old Fairview tailings dam, which has the potential to yield 25 000 oz a year for six years.
Illegal mining, which was plaguing the company, has been eliminated, but with high R18,2-million in security costs for the six months and a forecast of R35-million for the full financial year.
Thereafter, security costs are expected to normalise to around R20-million a year.
“The net result is that there is no illegal mining to report,” he says.
With police assistance, all eleven illegal-mining syndicates and all their subordinate structures have been arrested.
Intelligence is still being run to ensure that illegal mining does not surface again.