PAN African Resources (Panaf) cut its full-year gold production guidance about 7% after it decided to suspend underground mining at its Evander mine in Mpumalanga province whilst it worked on “critical infrastructure issues”.
The company also reported a fatal accident today at Evander’s 7 shaft after a miner was killed when a section of the main shaft pump column failed.
The cost of working on the infrastructure at Evander would be R40m – a sum that would be funded from the firm’s existing bank facilities, it said.
Panaf is due to report its interim operating and financial numbers on February 22. Shares in the company were 4.8% weaker at R2.79/share on the Johannesburg Stock Exchange.
In December, the company said in its trading update that it was undertaking a refurbishment programme at Evander’s 7A shaft. As part of the programme, it began engineering studies to assess the condition of underground mining infrastructure at Evander’s 7 and 8 shafts.
“These studies identified critical infrastructure issues requiring remedial action, to ensure safe and sustainable operation of these shafts,” the company said in a statement today.
“The nature of these refurbishments require a suspension of Evander’s underground mining operations for a period of up to 55 days, during which critical infrastructure issues will be addressed,” it said.
As a result, the guidance for annual gold production for the year ended June 30 was downgraded 14,000 ounces to 181,000 oz.
Evander’s tailings and surface operations would be unaffected by the underground mining suspension, it said.
Detail’s of the Evander underground refurbishment programme would be made available as part of the firm’s interim results presentation.
The fatality and review are a setback for Panaf’s Evander which came through a period of low grade intersections last year such that by the firm’s year-end, Evander contributed strongly to a 163% increase in share earnings of 30.20 cents.
