Fairview Mine, a key part of the Barberton Mines complex, boasts over 130 years of mining heritage, contributing significantly to the 80 000 ounces of gold produced annually by the complex. Picture: Supplied
After completing the acquisition of Tennant Consolidated Mining Group (TCMG), Pan African Resources yesterday said it expected to deliver 16% higher gold production for its full year period to June 2025 while it has also bumped up its production guidance for 2026 to a minimum of 235 000 ounces.
Last month, Pan African increased its stake in Tennant Consolidated Mining Group in Australia by 92%, bringing its total acquisition consideration for the transaction to $54.2 million (R625.6m).
For its first half year to December 2024, Pan African has projected bullion output to remain in line with thresholds for the six month period to June 2024 at 87 581 ounces.
It said early production from the Mogale Tailings Retreatment (MTR) operation, where output to the end of December 2024 is estimated to be approximately 9 000 ounces, had offset the impact of the delayed commissioning of Evander Mines’ vertical shaft.
“Production for the full year FY2025 is estimated at approximately 215 000 ounces an increase of 16% from the prior year,” said Pan African Resources.
Cobus Loots, Pan African CEO, said the company was now expecting “a much-improved performance for the Evander Mines underground operations” in the half year to June next year.
The company was also set to benefit from large investments in infrastructure and optimisation at the mine.
“We are poised to deliver a significant increase in gold production for the full financial year, and then again in FY2026,” Loots said.
“By March 2025 Pan African will also be largely unhedged, and at prevailing gold prices, the cashflow generation from our long-life portfolio of quality assets should allow for rapid de-gearing and flexibility in deploying capital on value-accretive growth and further sector-leading dividends.”
Pan African now had a diversified portfolio in South Africa, encompassing high-grade underground mining and high-margin surface operations. There is also the ability to further expand the surface business in the short term.
Regarding its underground operations, underground production ramp up delays at Evander Mines’ had now been resolved, with the sub-vertical hoisting shaft commissioning set for completion this month.
It will enable its full 700 tons per day hoisting capacity to be achieved although a production impact and loss of 7 000 ounces is to be expected from the delays.
Multiple Eskom transformer failures at Barberton Mines’ Fairview and Sheba operations had negatively impacted production for as much as 10 days during the month of November. This translated to losses of up to 2 250 ounces. The company’s plight was worsened by breakdowns of Eskom’s aged back-up units.
“Further contingencies are being implemented to prevent the failures from recurring, with additional spare transformers to be kept on site in the future,” said Pan African Resources.
Pan African added that it expects to be “materially unhedged by March 2025, when the last tranche of the synthetic forward sale is completed,” after which the gold miner stands to benefit from current elevated spot gold prices.
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