Dual-listed Pan African Resources (PAR) has reduced its production guidance to 175 000 oz for the year ended June 30, citing loadshedding and lower-than-expected ramp-up of operations at the Barberton Mines, in Mpumalanga.

The company also expects lower production from the Evander Mines’ underground operations, compared with what was expected at the start of the year.

Production guidance was initially set at between 195 000 oz and 205 000 oz.

Pan African advises production guidance for the financial year ending June 30, 2024, has been set at between 178 000 oz and 190 000 oz.

The impact of the lower gold production guidance in the reporting year has been partially offset by a higher gold price compared with last year; however, all-in sustaining costs will be higher at between $1 325/oz and $1 350/oz, compared with an initial expectation of $1 320/oz.

Pan African estimates it lost 10 000 oz worth of production owing to loadshedding, which impacted all of the group’s operations in South Africa, with load curtailments, power outages and surges, as well as difficulties related to transformers and other Eskom infrastructure, contributing to production disruptions.

To this end, PAR has been aggressively rolling out its renewable energy plans, to mitigate the impacts of these challenges.

The company explains that Evander underground operations underperformed in the reporting year, owing to geological challenges, particularly the faulting of the Kimberley Reef at the tail end of the 8 Shaft Pillar mining area.

Further, although there was slower-than-anticipated ramp-up of mining at the Fairview and Royal Sheba operations, as part of Barberton Mines, Pan African says production improvements have been noted in the latter months of the year.

Notably, optimisation of mining methods at two of Sheba’s stopes has improved underground grade and production, with an increase in monthly production from 6 600 t a month in the seven months to February 28, 2023, to 8 700 t a month during February to April.

A marked improvement in the Fairview production tonnes has also been noted. The average tonnes produced for the three months before April 30, 2023 increased by more than 10% to about 9 100 t a month, compared with an average of 8 100 t a month in the first seven months of the financial year.

Both mines are projected to deliver at least 5% a increase in tonnage.

Pan African says implementation of the Consort mine contractor model has progressed slower than expected, with challenges having been encountered during the recruitment process. A full production ramp-up for the operation, however, is expected in June.

Moreover, the company expects to start building the plant for the latest addition in its portfolio, the Mintails project. Steady-state production from the commissioned project is expected by December 2024.

PAR will release its results for the 2023 financial year on September 13.