LONDON (ShareCast) - (ShareCast News) - Pan African Resources, forecast higher production even as gold produced for the full-year to 30 June came in below its own guidance.
Pan African said it expected production in excess of 190,000/oz. in 2018.

Cobus Loots, the CEO of Pan African, commented: "the 2017 financial year was operationally challenging in many respects, however the Group is now seeing the benefits of the remedial actions implemented by management. We look forward to a much improved performance in 2018, with a substantial increase in gold production."

However, the board also announced that gold output at period-end was 4.4% below guidance for 173,000oz management itself had provided, due to a slower than anticipated restart of the underground mine at Evander Gold Mining Proprietary and operational challenges endured at Barberton Mines Proprietary, which had since been rectified.

The African-focused precious metals producer also highlighted some of milestones reached at other projects during the year.

Evander Mines 7 refurbishment was successfully completed alongside the material aspect of the restructuring programme.

A study was completed on the high grade Fairview Mining operation at Barberton Mines, from which it was estimated that capital expenditure of R105m would be necessary over a two-year period, which was expected to yield an additional 7-10koz of gold per annum.

The high grade drill result at Evander Mines 2010 pay channel was deemed encouraging and prompted a feasibility study to assess the economic viability of expanding the underground mining operations.

Elikhulu Tailings Recruitment Plant was reportedly fully-funded, with construction on track.

The company's net debt reduced to R66.7m as of 30 June 2017 from R339.7m at the end of the prior year, although it continued to have a available debt facilities of R880.2m.

Pan African remained optimistic about the future despite an operationally-challenging financial year:

The Elikhulu project was on track to delivering first gold as originally planned, and was expected to contribute low-cost ounces and profits over the next 18 months, company boss Cobus Loots said.

"We are excited about the prospects for the Evander Mines' 2010 Pay Channel project; the Evander Mines team now has to bring the project to account in the near term, in a profitable and value-accretive manner. During the past year, Pan African has reaffirmed our gold focus and again delivered transactions that crystallise shareholder value."

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