Mid-tier gold producer Pan African Resources expects to achieve the upper end of its production guidance despite ceasing some operations at its Evander gold mine in Mpumalanga.
The group said in a production update on Thursday it had narrowed its guidance for the year to end-June to 186,000oz-190,000oz (previously 180,000oz-190,000oz).
“In the second half of the financial year, [we] ceased processing of marginal surface sources at Evander due to this business, which contributed about 2,500oz in the first half of this financial year, becoming uneconomical,” the company said.
However, if production from these sources was maintained in the second half of the financial year, group production would likely have been more than 190,000oz.
The group, which has a dual listing on the JSE and the Alternative Investment Market (AIM) in the UK, has kept cost guidance for the year unchanged at $1,325oz-$1,350/oz.
CEO Cobus Loots said their robust production results, combined with record rand gold prices, should see the group deliver an “excellent” financial performance for the year.
“We are pleased that Pan African will achieve the upper end of our full-year production guidance, and would have exceeded guidance had we continued with the processing of surface material at Evander in the second half of the financial year,” he said.
In its interim results for the year, published in February, the company reported a 46% increase in profit for the six months to end-December.
This was largely due to a rally in the price of gold which was, at the time, up by 14% for the period.
Since February, the gold price has increased sharply, from about $2,000/oz to a peak above $2,400. In early May it dropped slightly to about $2,300/oz.
Pan African expects to increase gold production to between 215,000oz and 225,000oz in the next financial year when it will start benefiting from production from its new Mogale tailings retreatment (MTR) plant at the Mintails project.
The MTR plant near Carletonville, west of Johannesburg, is set to reach steady-state production by December.
“Our MTR project remains on schedule and on budget, and we look forward to commissioning it later in 2024,” said Loots.
Pan African’s share price on the JSE has climbed more than 37% since the beginning of 2024. At midday on Thursday it was up about 1.6% to R5.64.
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