JOHANNESBURG (miningweekly.com) – JSE- and Aim-listed Pan African Resources on Friday advised that it expected its earnings per share (EPS) for the financial year ended June 30 to be more than 20% lower than that of the prior corresponding period.

The gold miner pointed out that its 2013 EPS had included an exceptional gain relating to the acquisition of Evander Mines from Harmony Gold, as well as impairment charges on the disposal related to Phoenix Platinum and Auroch Minerals.

The net effect of these transactions were increased earnings of R71.9-million, or 4.44c a share.

For the 2014 financial year, EPS were expected to be between 26% and 31% lower than the 34.51c recorded in the prior year, while headline earnings per share (HEPS) were expected to be between 16% and 21% lower than the 30.07c reported for the 2013 financial year.

Pan African noted that the 1.7% decrease in the average gold price to R433 433/kg had contributed to the decline in HEPS.

Meanwhile, the company pointed out that the low-grade mining cycle at Evander Mines was expected to continue until February next year, and would, therefore, also impact on group results and earnings for the first six months of the 2015 financial year.

Pan African was implementing measures to mitigate the impact of the current and future low-grade cycles at Evander Mines. This included the construction of the Evander tailing retreatment plant, which was expected to be completed in January, as well as increasing the surface sources throughput at the Evander plant from 18 000 t/m to 30 000 t/m.

Further, vamping at the Evander No 7 shaft had been expanded to include the 15 level return airway mud accumulation project and would add additional ounces, while management was also concentrating efforts to increase the availability of conveyor belts in the Evander No 8 shaft declines.

Management had also rescheduled mine planning and improved mining flexibility by increasing development rates on the 25 and 25A levels at Evander No 8 shaft to access more stoping areas, and was also investigating long-term mining flexibility improvements that could potentially be achieved by extending the decline system down to 26 level.

This would increase the Evander mine life from 14 to 17 years. 

Pan African would release its results on September 16.