Pan African Resources PLC on Monday said its first half gold production dwindled, owing mainly to a poor performance at its Barberton mines in Mpumalanga, South Africa.
The Rosebank-headquartered gold producer reported a 15% decline in gold output to 92,307 ounces for the first six months to December, from 108,085 ounces a year prior.
The underground Barberton operations experienced a number of headwinds including inflationary increases in labour and energy costs, increasing depth and underground travel times at Fairview Mine, and depletion of the high-grade 42 Level block at Consort Mine.
To mitigate these challenges, the junior gold miner said it had agreed with unions to restructure the underground operations at Barberton. Consort Mine, it continued, is to be converted to a contractor mining operation. Both Fairview and Sheba Mines will implement a continuous operating cycle, while still allowing for ongoing maintenance and other support activities.
Pan African said its net senior debt more than double to $49.9 million from $23.9 million, primarily as a result of capital expenditure incurred on its organic growth projects
It expects Mintails’ project construction to start by June 2023, while Royal Sheba’s development plan is to be finalised in the next months.
‘At our Evander operation alone, electricity issues impacted production by approximately 5%, reinforcing our imperative to expand our renewable energy portfolio in the years ahead,’ Pan African Chief Executive Cobus Loots said.
Subject to the electricity supply, the miner maintained its annual production guidance of 195,000 ounces to 205,000 ounces for the full year to June 30, 2023. For the 2022 financial year, production amounted to 205,688 ounces.
The company expects to release its financial results for the first half on February 15.
In Johannesburg, Pan African shares shed 2.0% to R 3.85 on Monday morning. In London, the stock was down 3.2% at 17.88p each in early trade.
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