Pan African Resources has declared a maiden interim dividend of 12c per share as the company reported a record profit and cut net debt amid soaring gold prices.
Revenue increased by 157.3% to $487.1m for the six months ended in December, and adjusted earnings before interest, tax, depreciation, and amortisation rose almost fivefold to $245.2m.
Headline earnings per share increased by 511.7% to 7.34c and profit increased by 211.8% to a record $147.8m.
The group substantially degeared its balance sheet, with a reduction in net debt of 69.3% to $46.2m. At the prevailing gold prices, it expects to be in a net cash position by the end of February, it said.
“The half-year results demonstrate the success of our strategy of focusing on high-margin, long-life tailings retreatment operations and also the acquisition of the very prospective Tennant Mines in Australia,” said CEO Cobus Loots.
“Lower-cost operations, accounting for 88% of group production, delivered at an AISC [all-in sustaining cost] of $1,700/oz — a very compelling margin at prevailing gold prices,“ he said.
The group expects to produce 275,000 oz to 292,000 oz of gold for the 2026 financial year.
It has revised upwards its all-in sustaining cost of production to $1,820/oz-$1,870/oz. It said the increase reflects the effects of the stronger rand, higher employee share-based payment expenses as a result of an increase of more than 140% in the company share price and increased royalty payments due to the higher gold price.
In addition, material processed at the Evander Mines and MTR operations contributed to higher costs. it said.
Nevertheless, the full-year AISC is still expected to be lower than the first-half level due to higher production volumes anticipated in the second half.
A feasibility study to process the group’s Soweto Cluster tailings storage facilities at a stand-alone operation was successfully completed during the first half. The definitive feasibility study for a plant with expected annual gold production of 30,000 oz to 35,000 oz for a life of about 15 years is expected to be completed by June.
“Pan African has the ability to continue to deliver very attractive production growth over the next years, specifically internal expansions in Australia and around our MTR operation, which will not only add mine life but also significant additional production ounces,” Loots said.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.