Pan African reports increased first-half gold production

22nd Jan 2024 09:05

(Sharecast News) - Pan African released a production update for the first half of its financial year on Monday, reporting an improved safety performance, increased gold production, and progress on the Mogale Tailings Retreatment (MTR) Project.

The AIM-traded company reported a notable improvement in safety, with a decline in the total recordable injury frequency rate (TIFR) to 6.13 per million man-hours for the six months ended 31 December, down from 8.54 in 2022.

Gold production exceeded expectations, including at Barberton Mines underground, Evander Mines underground, Elikhulu tailings retreatment, Barberton tailings retreatment plant (BTRP), and Evander Mines' surface sources.

Pan African maintained its production guidance for the full year at between 180,000 and 190,000 ounces.

Additionally, production for 2025 was expected to significantly increase following the commissioning of the MTR Project, adding around 50,000 ounces per year to the group's output, making for a 25% increase.

The firm's all-in sustaining costs (AISC) for the reporting period were expected to be around $1,300 per ounce, thanks to effective cost control, improved gold production and favourable exchange rates.

Group net senior debt increased to $60m due to capital expenditure on the MTR Project and a dividend payment to shareholders in December.

Progress on the MTR Project's processing plant remained on track, with commissioning expected in the latter half of 2024 and steady-state production anticipated by December.

The construction was proceeding according to schedule and within budget, with key milestones achieved.

Progress at Evander Gold Mine's 24 to 26 level underground expansion project was meanwhile on track, including the construction of phase two of the refrigeration plant, development to access 25 and 26 level mining areas, and equipping the 17 level underground ventilation shaft.

On the environment, social and governance (ESG) front, Pan African said the construction of Fairview Mine's 8.75MW solar energy plant was progressing, with commissioning expected in June.

Community social and labour plan projects were continuing to benefit local communities and schools.

Environmental rehabilitation efforts, including cleaning up historical spillages, removing derelict pipelines, eradicating alien vegetation, and wetlands remediation, were said to positively impact local living conditions.

"We are pleased with the group's excellent safety, production and cost performance for the reporting period, which positions us well to deliver on our guidance for the full financial year," said chief executive officer Cobus Loots.

"Commissioning of the world-class processing plant at the MTR Project towards the end of this calendar year will further increase the group's production with approximately 50,000 oz per year of high margin ounces."

Loots said the commissioning of Barberton's solar photovoltaic plant would contribute to further cost savings in the next financial year, adding to the benefits already being realised from Evander's PV solar plant.

"We are also excited by the positive and tangible impact the group's ESG projects have made on improving relationships with our host communities and contributing to the sustainability of these areas."

At 1310 GMT, shares in Pan African Resources were up 4.73% at 16.38p.

Reporting by Josh White for Sharecast.com.