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Pan African Resources looks forward to year ahead after challenging period

The gold mining group is due to release its financial results next week, but, today's update emphasised a more positive trading in the current period.
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PAF said it is on-track for this year's production target

Pan African Resources PLC (LON:PAF) told investors that it is looking forward to the year ahead, following a period which saw a challenging operating environment.

In the company’s trading statement for the financial year, ended June 30, chief executive Cobus Loots said: “The group results for the 2018 financial year are reflective of both the incredibly challenging operational environment and the specific issues that confronted the group over the past year. 

“These issues, as well as the definitive remedial actions we implemented, were well disseminated to the market.

“The operational update and the commissioning of the Elikhulu plant demonstrates that we are well on track to deliver into our 2019 targets and look forward to the year ahead.”

READ: Pan African Resources agrees three-year wage deal with mining unions

The company noted that its forthcoming financial results statement, due next week, will include a £106.3mln one-off impairment related to the cessation of underground operations at the Evander mine.

In terms of annual earnings, the company said that GBP headline earnings per share would be 32-42% lower than in the prior period, anticipated in the range of 11.65 to 13.67 cents – the standard EPS figure is meanwhile expected between 0.5 to 0.76 cents, representing an 71-81% decline.

Expectations for the current financial year

It updated on the production performance at the Barberton Mines operation which the company described as benefitting from increased underground mining flexibility - with high grade platforms being available.

The mine is forecast to produce approximately 26,000oz for the first quarter of the current year, the company said, and it added that it is therefore ‘on-track’ to deliver its annual production target of 100,000 ounces.

PAF also noted that it anticipates an update to the group’s minerals reserves report, for the Royal Sheba deposit, by November and a corresponding definitive feasibility would then be due in February.

At Evander, surface and tailings operations continue and are expected to contribute some 4,000 ounces of gold during the first quarter. The company, meanwhile, continues to review the merits of mining from the Evander mine 8 Shaft pillar, and, it expects to update investors on this in the near future.

The company highlighted that the commissioning of the Elikhulu Project is progressing according to schedule and it is expected to produce at steady-state from October.

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