Aim- and JSE-listed midtier gold producer Pan African Resources exceeded its guidance for the financial half-year ended December 31, 2021 with record production of 108 085 oz – an increase of 9.9% on production in the comparable period of 2020.

The miner sold 107 142 oz – 8.9% more than the comparable 2020 period – at an average received gold price of $1 804/oz.

As such, the miner increased its full-year production guidance for the 2022 financial year to about 200 000 oz.

During the period under review, Pan African’s Barberton Mines produced 49 117 oz of gold and is on track to achieve full-year production guidance of about 100 000 oz.

The miner is also expecting improved performance from the Elikhulu tailings retreatment plant during the second half of the 2022 financial year, after production was adversely impacted as a result of inclement weather conditions experienced in November and December 2021.

Evander Mines’ 8 Shaft pillar increased its production by 72.5% year-on-year to 33 068 oz during the period, as well as improved its grade as a result of more face availability and increased production from the pillar and surface sources.

In terms of financial performance, Pan African’s net cash generated by operating activities increased by 54.4% to $43.4-million, while profit after taxation and headline earnings were $46.1-million, up from the $40.8-million achieved in the comparable 2020 period.

As such, earnings a share and headline earnings a share increased by 13.3% to $0.024 apiece, thereby leading to Pan African declaring a record net rand dividend payment in December 2021, converted to presentation currency of $21.6-million.

Pan African’s all-in sustaining costs for the period improved by 6.3% to $1 173/oz, while debt was lowered by 56.7% to $28.2-million.

OPERATIONS

CEO Cobus Loots says that, following a reprioritised capital programme, work is ongoing in preparation for the start of mining 8 Shaft’s 2 decline on 24 level. Mining from this level is anticipated to start in the 2023 financial year, as the current pillar mining reaches completion.

Pan African has also approved the development capital for Evander Mines’ 25 and 26 level project, which is expected to increase the life-of-mine for 8 Shaft to 13 years, with expected production from these levels of about 65 000 oz/y.

In addition, development work is ongoing at Barberton Mines’ Royal Sheba project, he says. “Project Dibanisa, which effectively connects the underground workings of the Fairview and Sheba mines, is also progressing on schedule and will reduce the operational cost of underground operations.”

At Mintails, the definitive feasibility study on Mogale Gold’s tailings storage facilities is being finalised.

Further, at the end of the six months under review, Pan African commissioned an independent fatal flaw assessment and gap analysis for the Blyvoor Gold tailings storage facility – the last remaining large-scale gold tailings resource available in South Africa. “This study [is] expected to be completed by April,” says Loots.

Meanwhile, Pan African also reports that its 9.97 MW solar photovoltaic (PV) plant at Evander mines is on track to be commissioned in March, following minor delays as a result of port disruptions and inclement weather.

“This plant, which will be delivered on budget, will be one of the first of its kind in the South African mining sector and demonstrates our commitment to sustainable energy solutions, with the benefits of cost savings and certainty of power supply,” he says.

A feasibility study to expand the solar PV renewable energy plant to 21.98 MW is under way, with the additional capacity designated for Evander Mines’ underground growth projects.

“A feasibility study for a similar-sized solar PV renewable energy plant at Barberton mines has been completed, with environmental permitting and detailed engineering design work progressing to plan . . . these plants will contribute to underpinning the group’s profitability and sustainability in the longer term,” says Loots.