Portfolio

Pan African Resources maintains guidance as it makes solid development progress

By Josh White

Date: Friday 17 May 2019

Pan African Resources maintains guidance as it makes solid development progress

(Sharecast News) - Pan African Resources updated the market on its trading for the nine months ended 31 March on Friday, reporting that its performance over the period reflected its efforts to maintain itself as a "safe, low-cost and long-life" gold producer.
The AIM-traded firm, which was holding its annual general meeting, said that safe, highly profitable and sustainable ounces at Elikhulu had replaces those of Evander's loss-making underground operations.

It added that it was continuing to optimise Elikhulu, which delivered a throughput of 1.3 million tonnes in March - 100,000 tonnes above nameplate capacity.

The focus was now on maximising sustainable margins from what the company described as a "world-class" operation.

"We have commenced the development and equipping of Evander Mines' 8 Shaft Pillar, with first gold expected in August," said Pan African chief executive officer Cobus Loots.

"The Evander 8 Shaft Pillar is expected to contribute an additional 20,000 to 30,000 ounces per annum for three years, at an all-in sustaining costs of approximately $900 per ounce, therefore making a meaningful contribution to the group's near-term production and profitability.

"The operation will be mined by a specialised and experienced independent contractor given the nature of pillar mining."

Loots told shareholders that the firm had completed "extensive" feasibility work on Barberton Mines' Royal Sheba project, adding that due to the group's disciplined capital allocation criteria and the capital cost estimates to develop the mine, Pan African would not pursue the project on a stand-alone basis.

He said the existing Barberton Mines' processing plant infrastructure could be upgraded to process ore from the orebody.

"The benefits of this approach is the ability to expedite the environmental licencing process, shorten the timeline to production, enhance returns from mining this orebody and negate the requirement for external capital funding.

"We look forward to updating the market on this project in the months ahead."

Pan African said it was confident that it remained on track to meet its gold production guidance of 170,000 ounces for the full financial year ending 30 June.

"With Elikhulu producing at a steady state for a full year and the incremental contribution from Evander's Pillar operation, we expect to produce approximately 185,000 ounces of gold for the 2020 financial year, which is a sizeable increase in our gold production profile," Loots said.

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