PAN African Resources is to pay a maiden interim dividend amid a strong operational performance for the six months ended December.
Announcing an operational update for the period, Pan African said on Monday it had increased production to 128,296 ounces – a 51% year-on-year improvement. This was mainly owing to the first time inclusion of gold from Tennant Mines in Australia and an increase in output from Mogale Tailings Retreatment (MTR) following an expansion.
But the catalyst to the performance is the vaulting gold price – up 30% from July to end December on a spot basis. Pan African said it received $3,368/oz on average which is 43% higher year-on-year (2024: $2,359/oz), benefiting from closing out its hedge book in April last year. This enabled it to cut net debt by 65% to $49.9m (June 30: $150.5m).
Such was gold’s continued upward momentum, the miner expected to be debt free by the end of this month. Gold burst through $5,000 per ounce today driven by a host of factors related to escalating US debt, debasement trade and geopolitical distress.
“Gold is the inverse of confidence,” Max Belmont, a portfolio manager at First Eagle Investment Management told Bloomberg News. “It’s a hedge against unexpected bouts of inflation, unanticipated drawdowns in the market, flare-ups in geopolitical risk.”
The metal is up 10% this month.
In recent weeks, the Trump administration’s actions — attacks on the Fed, threats to annex Greenland, military intervention in Venezuela — have also spooked markets, said Bloomberg News. For investors looking to navigate this uncertainty, the haven appeal of gold has rarely been more attractive, it added.
Said Cobus Loots, CEO of Pan African in a statement: “During the reporting period the group de-geared its balance sheet and is also now further boosting cash returns to shareholders, with our board set to approve an attractive proposed interim dividend payment”.
The proposal, yet to be approved by Pan African’s board, is an interim dividend of 12 South African cents a share. This is equal to 0.75 US cents a share assuming a rand/dollar exchange of 16.11.
Shares in Pan African gained 5.5% in early morning Johannesburg trade taking year-to-date gains to 17% – a remarkable improvement considering the stock tripled in value in the 2025 calendar year.
Pan African said it was “on track” to meet annual production guidance of of between 275,000 and 292,000 oz with potential production increases to come. Strong performances were registered from steady-state operations at Evander Mines – up 87% to 21,640 oz, and Elikhulu – up 14% to 29,450 oz.
Pan African said it was also evaluating a further expansion of its Soweto Cluster Tailings Storage Facilities (of which MTR is part) pending assessment of a feasibility study in June. If approved, the expansion will add 30,000 oz annually taking total output from the Soweto cluster to 100,000 oz at an all in sustaining cost of $1,000/oz to $1,200/oz.
Pan African expected to report a hefty increase in AISC for the full year of $1,825/oz to US$1,875/oz which compares to guidance of $1,525/oz to $1,575/oz owing to a stronger rand’dollar exchange, an increae in employee share-based payment expenses related to the higher gold price and the cost of third party ore at MTR and Evander.
