AUS
NZ
UK
CA
USA
IND
_10_04_2024_16_38_50_427275.jpg)
Pan African Resources PLC (LSE:PAF) CEO Cobus Loots has marked a decade at the helm of the South African gold mining company, describing the business as being in "compelling" shape. Loots emphasized the company's strengths, noting its combination of surface and underground mining operations, high-margin, long-life production, strong financial position, growth potential, substantial gold resource base, consistent dividend history, and commitment to environmental, social, and governance (ESG) principles.
These remarks accompanied the release of the company’s annual results, which revealed a 17% increase in revenues to $374 million for the year ending June 2024. Profits for the period also saw a notable rise, up 30% to $78.8 million. Gold production for the year rose by 6% to 186,000 ounces, with an 11% increase in the gold price received.
Looking ahead to the year ending June 2025, Pan African Resources forecasts an increase in gold production to between 215,000 and 225,000 ounces, driven by the forthcoming MTR tailings project. Production costs are anticipated to be in the range of $1,350 to $1,400 per ounce on a sustaining basis.
Loots noted that gold equities have been underperforming relative to the gold price, attributing this to concerns over capital allocation and sustainable value creation within the sector. Despite this, he is optimistic about the continuation of the high gold price trend. Pan African Resources boasts over 30 million ounces of SAMREC-compliant gold resources within its mining rights, secured in Barberton and Evander until 2051 and 2038, respectively.
The additional production from the MTR project is expected to position the company as a prominent mid-tier producer, with a projected 25% increase in production and a corresponding reduction in unit costs. The dividend declared for the year stands at R22c (US1.2c), and the company’s debt at the end of the year was reported as $106 million, reflecting the costs associated with the MTR investment.
