Pan African Resources chief executive Cobus Loots at the presentation of the company’s financial results yesterday. Photo: Itumeleng English

JOHANNESBURG - Gold mining company Pan African Resources said yesterday that it went through a bad patch recently, resulting in its gold production declining by 15.4%to 173285 ounces (oz) for the year to end June. Last year the group reported 204928oz.

However, the group believed it was on track of achieving its gold production guidance of 190000oz for the 2018 financial year as it had addressed critical shaft infrastructure repairs at Evander Mines, a key area.

It said despite the challenges and setbacks in the year to end June, it emerged stronger, with reduced debt and renewed focus on core operations and strategic growth path.

“Developments at our Evander Mines include the approval and commencement of construction (after year end) of the Elikhulu Project and improvements to the reliability of mine infrastructure, with the completion of critical structural and engineering refurbishments at Evander Mines’ No 7 Shaft during March and April 2017,” the group said.

Chief executive Cobus Loots said the 2017 financial year was operationally challenging. “However, the remedial actions were successfully implemented by management and are delivering the expected results. We have appropriately addressed critical shaft infrastructure repairs at Evander Mines, and the operation’s cost base is now leaner, without compromising the safety of the business,” Loots said.

Revenue from continuing operations decreased 15.5% to R2.93bn, down from R3.46bn compared with last year. However, in pound terms, revenue increased 5.1% to £169.6m (R3.05bn), from £161.3m, the pound percentage movement was positive due to the appreciation of the rand/pound exchange rate.

Pan African Resources is listed on the JSE and the London’s Alternative Investment Market.

In rand terms, group profit after taxation decreased 43.3% to R309.9m, from R547m, while in pound terms, group profit after taxation decreased 29.8% to £17.9m, from £25.5m reported a year earlier. The group said profits were adversely impacted by reduced gold production and a flat rand gold price during the year.

Earnings per share (Eps) decreased 34.4% to 19.81cents a share, from 30.20c, while in pound terms, Eps decreased 19.1% to 1.14pence a share, down from 1.41pence as compared to last year.

Gold production and realisation costs were well contained, increasing by only 7.7% to R2.34bn, up from R2.18bn.

The board has approved the R1.74bn Elikhulu tailings retreatment project during the 2017 financial year with the group stating that this project is now fully funded with all environmental approvals in place and construction commenced in August 2017.

The group said the disposal of the Uitkomst Colliery in June to Coal of Africa realised a profit of R91.3m, demonstrating the value created over the 15 months of its ownership.

Pan African shares fell 0.42% on the JSE yesterday to close at R2.35.

- BUSINESS REPORT