LONDON (ShareCast) - (Sharecast News) - Pan African Resources reported a 9.9% improvement in group gold production in an update on Wednesday, to a record half-year production total of 108,085 ounces, as it increased its full-year production guidance to around 200,000 ounces.
The AIM-traded firm said gold production from Barberton Mines for the six months ended 31 December was 49,117 ounces, down from 52,354 year-on-year, while Elikhulu and Evander Mines produced 25,900 ounces and and 33,068 ounces, compared to 26,863 ounces and 19,169 ounces, respectively.

It said it had achieved a vaccination rate of 77%, and was continuing to implement and maintain "stringent policies and protocols" to mitigate the effects of the ongoing Covid-19 pandemic on employees and production.

Group net senior debt narrowed by 60.1% to $23.9m, after the payment of a record net dividend of $21.6m in December.

Environmental, social and governance (ESG) projects, including the 10MW renewable energy solar photovoltaic plant at Evander Mines and large-scale agriculture projects at Barberton, were on track for commissioning before the 30 June financial year-end.

"Pan African has again delivered an excellent operational performance, achieving record gold production in excess of 108,000 ounces for the current reporting period," said chief executive officer Cobus Loots.

"This exceeded the expected 105,000 ounces announced in the group's December production update, and was achieved while continuing to manage the impact of the Covid-19 pandemic and maintaining an excellent safety record.

"The reduction in the group's net senior debt to $23.9m represents a 60.1% decrease relative to the outstanding net senior debt at 31 December 2020, notwithstanding the payment of a record final rand dividend for the June 2021 financial year."

Loots said Barberton Mines' gold production of 49,117 ounces was a decrease of 6.2%, although the firm was still forecasting that the operation would achieve its full-year production guidance of around 100,000 ounces.

"At Elikhulu, production was down marginally by 3.6% to 25,900 ounces, mainly as a result of inclement weather conditions experienced during November and December.

"Evander Mines' 8 shaft pillar delivered an excellent performance during the current reporting period, demonstrating the potential of this operation.

"Elevated grades and improved mining rates, as a result of improved face availability, increased production from the pillar and surface sources by 72.5% to 33,068oz for the period."

Cobus Loots said that, following the reprioritised capital programme, as announced in its 2021 final results, work was continuing in preparation for the inception of mining Evander's 8 shaft No.2 decline at the 24 level.

"Mining from this level is anticipated to commence in the 2023 financial year, as the existing pillar mining reaches completion.

"Studies to access the 25 and 26-level mineral resources at 8 shaft are also at an advanced stage."

The company's organic growth projects had the potential to increase Evander's operating life by an estimated 20 years, Loots explained.

"The group is on track to produce 200,000 ounces of gold for the financial year ending 30 June, and we are committed to continue creating value for our stakeholders by positioning Pan African as a sustainable, safe, high-margin and long-life gold producer with an attractive pipeline of growth projects."

Pan African said it would present its interim results for the six months ended 31 December on 16 February.

At 1157 GMT, shares in Pan African Resources were up 2.56% at 18.46p.

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