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JOHANNESBURG - Pan African Resources rallied on Friday rising 8.75% to trade at R1.25 a share at 11am on  Friday after the gold and ore company reported a 32 percent head grade improvement at its Barberton Mines in Mpumalanga.

The company said that the average head grade for the Barberton Mines complex, which comprises the Fairview, Sheba and Consort mines, had risen to 11.5 grams a to last month from an average of 8.7 grams a ton between July and December 2017.

“This 32 percent increase in head grade is predominantly as a result of mining high-grade ore at the 272 platform since January 2018,” the company said adding that these platforms underpinned Fairview’s high-grade production and mining flexibility.

Pan African also said that construction of the R1.7 billion Elikhulu Tailings Project at the Evander mine in Mpumalanga was progressing ahead of schedule with first gold expected in August.

It expects the project to ramp up to full production of roughy 55 000 ounces a year to take no longer than two months. Elikhulu is set to be a low-cost gold producer with an output of 500 000 ounces a year for the first eight years of operations and 45 000 ounces of gold for the remaining five years.

The company also said  Elikhulu would produce gold at an all-in sustaining cost of production of below $650 an ounce, at the prevailing rand-dollar exchange rate. 

“In conjunction with the Evander Tailings Retreatment Plant, these two operations are expected to produce more than 70 000 ounces per annum,” the company said.

Tailings also also called mine dumps, are the materials left over after the process of deep level mining over centuries.

Peter Major, a director of mining at Cadiz Corporate Solution,  said: “Tailings re treatment is Pan Africa's only chance to gain access to high-grade ore.” 

Pan African also  operates the Evander Gold Mine where it is in a consultation process with organised labour in terms of section 189 of the Labour Relations Act amid plans to cut the workforce. 

The company expects to make announcements ‘in due course’.

The National Union of Mineworkers (NUM)  last month said it was concerned about that company’s plan to retrench 1 722 mineworkers of its 1 812 workforce as the mine grappled with the deteriorating and inadequate infrastructure, high operating costs such as rising electricity, labour costs and a low gold price.

 “The NUM is totally opposed to these retrenchments at Evander Gold Mine. The retrenchment of 1722 permanent workers is bad given the fact that the majority of mineworkers support 10 people per family which mean that a lot of people will be negatively affected by these retrenchments,” the union said.

It said that the construction of a regrind mill at the Barberton Tailings Retreatment Plant (BTRP) was proceeding according to schedule with commissioning anticipated in the last week of April 2018. 

“On commissioning of the regrind mill, production at the BTRP is expected to increase to approximately 21 000 ounces per annum,” it said.