JOHANNESBURG (miningweekly.com) – Pan African Resources expects its earnings a share for the financial year ended June 30, to be between 157% and 177% higher than the 11.48c it reported for the previous financial year, owing to robust operational performances from its Mpumalanga-based mines.
The miner expects headline earnings a share to rise between 152% and 172% on the 11.67c it reported for the six months to June 30, 2015.
The improved operational performance at its Barberton and Evander operations was further supported by the 21.6% increase in the realised rand gold price to R542 850/kg, up from R446 274/kg the year before.
The group’s earnings were further enhanced by consolidating the Uitkomst colliery’s results for the three months effective from April 1.
Phoenix Platinum’s production was, however, adversely impacted by the curtailment of current arisings following International Ferro Metals being placed into business rescue.
Barberton Mines in July 2015 entered into a short-term strategic hedge, when the prevailing spot gold price was R440 000/kg, to protect its cash flows and the group’s yearly dividend against severe adverse movements in the rand gold price.
During the current reporting period, the group recorded a post-tax unrealised mark-to-market fair value loss of R82-million on the cost collar.
The economic consequence of the mark-to-market fair value adjustment is to lock in revenue on 25 000 oz of gold production from Barberton Mines at R625 000/kg for the 12-month period starting October 1.