Pan African Resources plc (LON:PAF) have seen progress in the first half of their financial year in an update on Tuesday.
The firm did admit that it had faced ‘challenges’ so far in its financial year – however performance had improved as growth was sustained.
CEO Cobus Loots commented:
“Our business strategy of delivering safe, sustainable and high-margin gold production has yielded improved operational, financial and safety results for the six months ended 31 December 2019.
In the current reporting period, our team delivered a robust operational performance, with gold sales volumes increasing by 13.6% to 90,602oz.
Despite the increase in the Group’s overall AISC for the current reporting period, all-in sustaining costs (“AISC”), at our tailings businesses operated at exceptional margins, with Elikhulu producing at an AISC of USD708/oz and our Barberton Tailings Retreatment Plant reporting an AISC of USD643/oz. We are pleased to maintain our previous guidance of gold production of 185,000oz, at an AISC below USD1,000/oz, for the full 2020 financial year.”
The gold miner said that pretax profit had surged to $27.2 million in the six month period which ended on December 31. This showed a great appreciation from one year ago, where Pan African reported a figure of $12 million.
Notably, revenues also climbed from $97.5 million to $132.7 million which shareholders will be pleased with.
Pan African noted that the South African operating environment remained challenging, as the firm alluded to issues such as electricity availability, illegal mining, community protests and disruptions, escalating costs and regulatory uncertainty.
Looking at volumes of gold production, this was rather pleasing for the firm and its respective shareholders.
Gold production increased by 15% from 81,014 ounces a year ago to 92,941 ounces, which drove gold sales for the period by 14% to 90,602 ounces.
The mining firm alluded to the rising price of gold, saying that across the period gold prices rose 20% to $1,464 per ounce from $1,222 per ounce a year earlier.
Loots concluded by saying:
“Despite some of challenges, including electricity supply constraints and illegal mining, Pan African Resources has demonstrated the ability to operate successfully in South Africa. We will continue to use our experience and resources to improve the lives of all our stakeholders and grow shareholder value.
Management’s key focus for the remainder of the 2020 financial year includes further improving the safety performance, delivering on production guidance, reducing operational costs, managing cash flow generation and strengthening the Group’s financial position by reducing senior debt.”
Pan African build from July update
The update from the gold miner today shows positive growth from the update which the firm gave in July.
The Company told investors that gold production from its continuing mining operations spiked 54.1% to 172,442oz and said production from its continued and discontinued operations was up by 7.5%.
Its largest operation, Baberton Mines, saw production rise 9.6% to 99,636oz of gold, while Evander mines’ volumes grew from 21,250oz to 26,878oz year on year.
Its Elikhulu tailings retreatment plant operation produced 46,201oz of gold, which exclude pre-production gold volumes of 736oz.
Pan African Resources added that the plant processed 10.85 million tonnes from the period between September 2018 and June 2019.
Shares in Pan African Resources trade at 12p (+1.73%). 18/2/20 12:33BST.