Sunday, December 17, 2017
Cobus Loots

Cobus Loots

Pan African Resources

COMMUNITY unrest at Barberton Mines over the past few months, combined with a volatile gold price, and an increase in safety stoppages, are making for some stern challenges for Loots in 2017. On the plus side, Pan African unveiled a R300m dividend, its largest yet, and plans to build the R1.74bn Elikhulu Tailings project that will increase mining from surface sources to 40% of total production which reached just over 200,000 ounces in its last financial year. The group’s share price didn’t respond enthusiastically, however; perhaps this represented trepidation that some R1bn of the Elikhulu project would be funded from debt. Assuming a gold price of $1,100/oz, and a price received of R17,110/oz, Loots hopes to achieve payback on the project in less than four years. Meanwhile, there is pressure to maintain production – and cash flow - at Pan African’s existing operations: for instance, output will be lower at Evander following “the dislodgement of a steel shaft guide” at the mine’s No. 7 shaft which was affecting hoisting speeds. Loots spearheaded Pan African’s investment in a coal mine as well as the repurchase of its own shares from its black empowerment partner, Shanduka. These have been good investments, but it will be interesting to see how ambitions track reality in the 12-months ahead.


He was MD of Shanduka Resources, Cyril Ramaphosa’s mining investment company, until 2009 when he became financial director of Pan African. His experience includes stints at Shanduka Coal, Sentula Mining and Macquarie Africa, where he was an investment banker. He has a CFA.

“Operating low cost tailings plans has become an important business for us.”