AP Photo/Michael Probst
DURBAN - Pan African Resources resumed the payment of dividends after the precious metals producer swung back to profit in the year to end June by reporting a profit after tax of $38million (R559.5m) following an improved financial performance from its Barberton and Evander mines.

The group improved from last year's loss after tax of $122.8m. As a result, Pan African Resources declared a dividend of 2.24cents a share after it passed on paying a dividend last year.

The group was also boosted by a surge in the price of gold and a 27percent reduction in the all-in sustaining cost an ounce to $988/oz compared to $1358/oz last year.

Chief executive Cobus Loots said it was a pivotal year for the group as it had successfully repositioned their operations as one of South Africa's lowest cost gold producers, focused on delivering safe and profitable ounces from Evander and Barberton.

“Our all-in sustaining cost per ounce was reduced by 27.2percent to $988/oz. Underpinning our strong operating performance - and the delivery of 172442oz to exceed our production guidance - is our commitment to safety and fostering a culture focused on creating sustainable value for all our stakeholders,” Loots said.

Headline earnings also increased by 27.4percent to $22.8m, compared to last year, while revenue from continuing operations increased by 49.1 percent to $217.4m due to an increase in gold produced by the Barberton tailings retreatment plant, the contribution from the newly commissioned Elikhulu project and Barberton Mines’ underground mining operations.

Earnings per share increased to 1.97 US cents (R0.29) a share, improving on last year's 6.79 US cents loss a share and headline earnings per share (Heps) increased by 20.2percent to 1.19 US cents compared to last year's Heps of 0.99 US cents. Loots said: “Our production guidance of 185000oz for the 2020 financial year is a substantial increase from the year past.

"The Egoli Project and our new optimisation projects at Evander and Barberton present compelling near- and mid-term growth opportunities.”

Gold production from the group's continuing mining operations increased by 54.1percent to 172442oz, up from last year’s 111879oz, with the gold production exceeding the full-year production guidance of 170000oz.

Looking ahead, Loots said that the group was entering the new financial year with confidence.

“In the year ahead, we will focus on debt reduction, while also continuing to invest in our business,” he said.

The group’s net debt increased to $129.9m during the period compared to last year’s debt of $118m.

Pan African Resources shares closed 2.63percent lower at R2.22 on the JSE yesterday.

BUSINESS REPORT