Pan African Resources LON:PAF, the AIM-listed mining and exploration company operating gold mines in South Africa has published its Interim Financial Results to 31st December 2022.
It was a bit of a disappointing set of results for the Rosebank-headquartered miner, reporting a 15% decline in gold outputs to 92,307 ounces (oz) for the half-year to end-December.
Poor mine performance
A year ago, Pan African had produced 108,085oz and the company attributed falling production to the poor performance of Barberton mine in the Mpumalanga Province of South Africa.
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Pan African opened trading today (16th February) at 14.6p today, and has offered a year-to-date return of -10%, a one-year return of -22.7% with its shares ranging between 14.52p and 24.5p over a 52-week period.
The company has a market cap of GBP324.5m.
The miner explained that in the period, Barberton had experienced a number of negative developments including increases in labour and energy costs due to inflation, increasing depth and underground travel times at Fairview Mine, and depletion of the high-grade 42 Level block at Consort Mine.
Promise to improve
Cobus Loots, Pan African’s chief executive said in a statement: “We believe that the tangible measures being implemented at these operations, as detailed in this announcement, will result in a significant improvement in production during the second half of the financial year and in the years ahead. The balance of our portfolio delivered in line with expectations, despite disruptions to our electricity supply and inclement weather conditions adversely impacting operations.”
The company said it had agreed to restructure underground operations at Barberton, after consultation with representative trade unions. Consort Mine is being switched to contractor mining and Fairview and Sheba is to implement a continuous operating cycle.
Double debt
Debt was up to nearly USD50m from USD24m in the corresponding period. Loots said that this was a result of capex on it growth projects.
Pan African had some positive news concerning its Mintails project, which should go into construction by June 2023.
Loots highlighted electricity supply issues, but subject to the electricity supply, the miner maintained its annual production guidance of 195,000oz to 205,000oz for the full year to June 30th 2023. For the 2022 financial year, production amounted to 205,688 ounces. All-in sustaining costs for the six to end-December 2022 were USD1,291/oz, up from USD1,173/oz in the same period of 2021.
Profit after tax was USD28.9m down from USD46.1m for the corresponding period of 2021, with headline earnings of USD29.1m, down from USD46.1m.
