Pan African Resources said yesterday that the reduced gold production over the past six months could primarily be attributed to the performance of Barberton Mines’ underground operations.
In its interim financial results for the six months ended December 31, 2022, the mid-tier African-focused gold producer said gold production for the second half of the 2023 financial year was 92 307 ounces (oz) compared to 2021’s 108 085 oz.
The group said full-year production guidance maintained between 195 000 oz and 205 000 oz, subject to Eskom’s electricity consistency supply as the power utility still implemented load shedding amid an operational crisis.
For the period under review, the group said its profit after tax of $28.9 million (R520.3m) decreased by 37% from $46.1m in the comparative period.
The all-in sustaining costs of $1 291 per ounce increased by 10% from $1 173 per ounce.
Pan African’s CEO, Cobus Loots, said: "Reduced gold production over the past six months can primarily be attributed to the performance of Barberton Mines’ underground operations.
“Given the increased production performance expected in the second half of the 2023 financial year, we will maintain production guidance of 195 000 oz to 205 000 oz for the full year subject to Eskom’s electricity supply,” he said.
Loots said at the Evander Mines operation alone, electricity issues adversely impacted production by about 5%, reinforcing its strategic objective to expand the firm’s renewable energy portfolio in the years ahead.
The balance of Pan African Resources’ portfolio had delivered in line with expectations, despite disruptions to its electricity supply and inclement weather conditions adversely impacting operations, he said.
Pan African Resources was also installing solar plants to help overcome South Africa's power problems.
"We have now convincingly demonstrated the business case for renewable energy in the South African mining industry and will maintain our strategic objective to expand this footprint significantly in the coming years," the group said.
Last month, Pan African said it had agreed on a restructuring plan with unions at the Barberton complex, with the focus switching to the Fairview and Sheba deposits and Consort to become a contract operation.
"We believe that the tangible measures being implemented at these operations will result in a significant improvement in production during the second half of the financial year and in the years ahead,“ Loots said.
The group said Barberton Tailings Retreatment Plant produced 10 012 oz for the current reporting period, while the Evander Mines’ underground production decreased by 29.8% to 19 173 oz, despite an increase in processed tonnes by 6.0% to 73 946 t due to the normalisation of mining face grades in line with planned grades and limited mining rates in accordance with geo-technical parameters for the shaft pillar’s safe extraction.
Looking ahead, the group said it expected its production for the full 2023 financial year to be in line with the production achieved in the 2022 financial year.
“We are positioned for further growth as we progress the development of our organic projects and seek to commence with the full-scale construction of the Mintails project,” it said.
BUSINESS REPORT