Pan African Resources announces new group production guidance

Pan African Resources has announced its production guidance for the current financial year reduced to approximately 175,000oz (previously 195,000oz to 205,000oz), primarily as a result of:

• Challenges related to Eskom generated electricity supply, resulting in a production loss of approximately 10,000oz of gold
• Slower than anticipated ramp-up of continuous operations at Barberton Mines, largely addressed as highlighted below
• Lower than expected production from Evander Mines’ underground operations.

Tailings operations at Barberton and Elikhulu are performing in line with expectations. Group production guidance for the financial year ending 30 June 2024 of 178,000oz to 190,000oz, with a further production increase in the 2025 financial year, following the Mintails project’s commissioning during the first half of this financial year.

Electricity supply

The Group estimates a production loss of approximately 10,000oz for the current financial year as a result of issues related to Eskom generated electricity supply impacting all of the Group’s operations.

In addition to load curtailment, power outages and surges, difficulties related to transformers and other Eskom infrastructure contributed to production disruptions.

As per the announcement released on 15 May 2023, Pan African is aggressively rolling out its renewable energy plans in order to mitigate the impact of this challenge.

Pan African CEO Cobus Loots commented: “Whilst we are disappointed with the production performance of our underground operations for the current financial year, the turnaround at Barberton Mines is now evident, especially in the past two months, following a longer than anticipated ramp-up after the implementation of continuous operations at Fairview Mine and Sheba Mine and implementation of the contractor mining model at Consort Mine. Barberton Mines’ underground production tonnes have demonstrated a notable increase during the past two months, with further increases expected during the remainder of the  current financial year. Implementation of the contractor mining model at Consort Mine is also bearing fruit and the operation is expected to return to profitability in the short term.

Pan African is leading the way in terms of rolling out renewable energy projects and reducing our dependency on Eskom. In the coming years, we believe this strategy will greatly benefit all of our stakeholders.

The development of the 24 Level project at Evander Mines is progressing well, with crews redeployed to the 24 Level area as the 8 Shaft pillar mining nears completion. Improved mining flexibility, together with the other initiatives being implemented to ensure that infrastructure availability is optimised, will ensure sustainable production from this long life underground operation.

Ground clearing at the Mintails project has commenced in anticipation of the senior debt component of the funding package being closed by June 2023. Commissioning of the plant is expected in the fourth quarter of the 2024 calendar year, which will result in a significant increase in the Group’s production profile from the 2025 financial year onwards.

Despite lower than expected production, the Group is positioned to deliver a robust financial performance for the current financial year as a result of the excellent rand gold prices being received and also disciplined operational cost control.”