LONDON (ShareCast) - (Sharecast News) - Pan African Resources updated the market on its operations for the six months ended 31 December on Friday, reporting "good progress" in repositioning itself as a long-life, low cost and focussed gold producer.
The AIM-traded firm said gold production from its continuing mining operations increased 54.2% year-on-year to 81,014 ounces, with "robust" operational performances from Barberton Mines' underground operations, and also from the group's tailings retreatment plants.

Gold production from the Barberton complex significantly increased by 24.5% to 50,556 ounces, and the new Elikhulu tailings retreatment plant contributed 15,292 incremental low-cost ounces, up from nil in the prior year.

Elikhulu reached nameplate throughput capacity in October, the board reported, and its optimisation was continuing.

The group said its continuing focus on safety and ongoing safety improvements yielded "encouraging" results, with material improvements in safety statistics during the current reporting period.

It said its improved production performance, curtailment of large scale underground mining operations at Evander Mines, and the contribution of incremental low-cost ounces from Elikhulu had resulted in a "marked reduction" in its all-in sustaining cost of production.

Further detail on costs would be provided as part of its interim results, the board said.

Pan African Resources also noted that Barberton's three-year wage agreement was expected to assist with stability at the operation in the coming years.

"The operational and safety performance during the current reporting period demonstrates the progress in repositioning our group as a low-cost, long-life producer, with the safety of our employees and contractors always being of paramount importance," said chief executive officer Cobus Loots.

"We are very pleased with the commissioning of Elikhulu during the period under review, notwithstanding the challenges associated with delivering a project of this magnitude and complexity on time and within budget.

"We now look forward to Elikhulu's growing contribution to the group's results in forthcoming reporting periods."

Loots said that in the period ahead, management would continue to focus on further improving the company's mining operations.

"The group remains on track to produce 170,000 ounces for the full financial year to 30 June 2019."

As the firm had previously communicated, Cobus Loots said the drilling programme on Barberton Mines' Royal Sheba prospect was completed, indicating a near-surface mineral resource of 0.37Moz with a 900m strike and 150m down dip extension.

The total mineral resource was now 0.76Moz - 8.97Mt at 2.62g/t - comprising the near surface resource of 0.37Moz - 5.85Mt at 1.96g/t - and the underground mineral resource of 0.39Moz - 3.12Mt at 3.87g/t.

"We have a demonstrable record of replenishing our mineral resources through effective exploration and look to organic growth projects, such as Royal Sheba, to further enhance the sustainability of the group's operations and to continue to deliver attractive returns to all our stakeholders."

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