Pan African Resources cuts debt, surpasses output targets
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PAN African Resources, the JSE-listed mid-tier gold producer, pushed through its degearing plan and surpassed its output target for the year ended June 2021 on the back of an improvement at the Barberton Underground Mines, the group said yesterday.
Pan African said senior debt had declined by 45.5 percent to $33.8 million (R482m), from $62m at the end of June last year.
The company said that in dollar terms, this represented a reduction in net senior debt of 43.6 percent relative to the debt levels at December 31, 2020, of $59.9m (R880.5m at an exchange rate of rand/dollar of 14.78).
“We have now largely achieved the degearing of our balance sheet, and current debt levels are very manageable, enabling the group to fund all its capital requirements from internally generated cash flows and existing facilities,” chief executive, Cobus Loots said.
The strong gold price environment has been a catalyst for strong revenue growth and the reduction of debt by mining houses.
Pan African said improved operational flexibility saw Barberton producing 84 819 ounces from 68 129 ounces a year earlier helping the group push through 200 000 ounces of output.
The group said output for the year was 201 608 ounces of gold in 2021, which was 12.3 percent higher than the 179 457 ounces produced a year.
Production for the year was 3.4 percent more gold than the revised production guidance of around 195 000 ounces which was announced in May.
“We are very pleased with the group’s operational performance over the last year, and the fact that our team managed to exceed the revised production guidance for this period,” Loots said.
Loots said in the year ahead, Pan African’s operational focus would emphasise the further improvement of the safety performance and the continued optimisation of operations
“Environmental Social and Governance remains a top priority for Pan African, with renewable energy projects, reduced emissions, land rehabilitation, biodiversity conservation and large-scale agri-project initiatives being our short to medium-term initiatives,” said Loots.
Pan African said the Covid infection rate at its operations remained low relative to the number of employees with some 257 positive cases recorded since the start of the pandemic. Seventeen cases were currently active, with a 93 percent recovery rate achieved to date.
The group said it expected to release its financial results for the year ended June 2021 in September.
Pan African remained unmoved to close at R3.34 a share on the JSE yesterday.