Pan African Resources PLC
LSE:PAF
Pan African Resources PLC
Pan African Resources Plc engages in the exploration, mining and production of precious metals. The firm's segments include Barberton Mines (including the Barberton Tailings Retreatment Plant (BTRP)) located in Barberton; Evander Mines (the Elikhulu Tailings Retreatment Plant (Elikhulu), eight Shaft pillar and surface sources) located in Evander; Agricultural environmental, social and governance (ESG) projects comprises of Barberton Blueberries project (Barberton Blue Proprietary Limited (Barberton Blue)) as well as other small-scale agricultural projects in the Barberton Mines host community area; Solar projects consist of the solar photovoltaic renewable energy plant located at Evander Mines; Funding Company, which provides treasury function activities, and Corporate consists of the holding companies and management services which render services to the Company and is located in Johannesburg.
Pan African Resources Plc engages in the exploration, mining and production of precious metals. The firm's segments include Barberton Mines (including the Barberton Tailings Retreatment Plant (BTRP)) located in Barberton; Evander Mines (the Elikhulu Tailings Retreatment Plant (Elikhulu), eight Shaft pillar and surface sources) located in Evander; Agricultural environmental, social and governance (ESG) projects comprises of Barberton Blueberries project (Barberton Blue Proprietary Limited (Barberton Blue)) as well as other small-scale agricultural projects in the Barberton Mines host community area; Solar projects consist of the solar photovoltaic renewable energy plant located at Evander Mines; Funding Company, which provides treasury function activities, and Corporate consists of the holding companies and management services which render services to the Company and is located in Johannesburg.
Resilient Performance: Pan African delivered a robust financial performance in FY2023 despite lower gold production, with a strong rand gold price helping offset declines.
Production Outlook: The company expects annual gold production to exceed 200,000 ounces in 2025 as Mintails and Evander underground projects ramp up.
Cost Management: All-in sustaining costs rose just 3.1% to $1327/oz, in line with guidance, and are expected to remain stable next year with further reductions targeted as new projects come online.
Capital Projects: Major investments at Mintails and Evander are fully funded through debt and cash flow, with Mintails on track for commissioning in December 2024.
Dividend Commitment: The company maintained an attractive dividend, proposing ZAR400 million ($21M) for FY2023, representing a 5.9% yield in rand terms.
ESG Progress: Notable achievements in renewable energy, water treatment, and community employment were reported, and the company issued its first TCFD report.
Hedging Strategy: Short-term gold price hedges are in place to secure cash flows during heavy capital spend, with flexibility to adjust exposure as projects are completed.
Operational Challenges: The company faced inflation, skills shortages, and security issues but believes risks are manageable given project scale and experience.
