London and JSE-listed gold miner Pan African Resources says it will hit production guidance of 185,000oz for its financial year to end-June despite community unrest and geological problems at the group’s Barberton Mines where production fell 6,3% in the six months to end-December.
Reasons are the production build-up from the Elikhulu tailings treatment plant as well as the production build-up from the Evander Mines 8 shaft pillar project which poured its first gold in August last year and is forecast to reach steady-state production during March as planned.
In an operational update for the six months to December, Pan African CEO Cobus Loots commented the 8 shaft pillar project, “is forecast to contribute 30,000oz of gold or more per annum to the group’s production over a three year period once operational steady-state is reached.”
Barberton’s gold output dropped to 47,356oz (six months to December 2018 – 50,5556oz) because of community unrest experienced during July last year which hit underground production and “challenging geological conditions” at the Fairview mine.
Loots said, “ Barberton is pursuing legal action against instigators involved in this unrest and has experienced no major disruption to our operations in the past months. Enhanced security initiatives have also contributed to curtailing illegal mining and criminality.”
Pan African’s net debt dropped to R1.6bn at end-December from R1.9bn at end-June last year and Loots pointed out the company is obligated to reduce this to R500m by June 2014 but he added, “the senior debt redemption profile can be accelerated and, in the light of the prevailing robust gold prices and strong operational cash generation, the company is forecast to measurably reduce its debt during the next two financial years.”