Pan African prepares groundwork for Egoli project

Pan African Resources hope to finalise a debt funding package for its Egoli project by the end of next month as it moves forward with SA’s newest underground gold mine. It says the brownfield development will contribute considerably to its future gold production.

Releasing interim results yesterday, the gold mining company said it had commenced with early preparation work for Egoli, which is being developed on the site of its Evander complex using existing infrastructure to keep costs down. Construction of a 9,975MW solar photovoltaic plant at Evander was also on track to commence during the first quarter of the year, with first power expected to be generated during the third quarter.

Pan African reported a 5.9% increase in gold production to 98,386 ounces over the six months to end-December, supported by a strong operational performance from Barberton Mines. While the ramp up at Evander’s 8 shaft pillar had been slower than expected, it expected a much-improved second-half performance as the pillar mining gained momentum. Net cash generated by operating activities jumped 178% to $28.1 million, supported by higher production and a stronger gold price. That allowed it to reduce net debt by 47% to $65.2 million. Profit after tax and headline earnings rose 88% to $40.8 million. That left headline earnings per share 87% higher at 2.11 US cents.

Pan African’s improved operational and financial performance for the six months ended 31 December 2020 continues to demonstrate the resilience and operational flexibility of our multiple producing assets, despite the challenges of the ongoing Covid-19 pandemic,” CEO Cobus Loots said. “We are committed to continuing to create value for our stakeholders by positioning Pan African as a sustainable, safe, high-margin and long-life gold producer.”
The company said it was on track to deliver on its full-year production guidance of about 190,000 ounces.

Its shares fell 5.4% to R4.23 yesterday.

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