New plants, shafts yield promising gold volumes for Pan African Resources | Fin24

New plants, shafts yield promising gold volumes for Pan African Resources

Jan 27 2020 22:15
Londiwe Buthelezi

Investment into new plants and shafts is already bearing fruits for gold producer Pan African Resources, which reported on Friday morning that its Elikhulu treatment plant almost doubled production, while another shaft opened in August last year to become a money-spinner from March.

The mid-tier gold producer has three underground mines in the Barberton area, and treatment plants and a shaft pillar mining operation in Evander Mine in Mpumalanga. The R1.7bn Elikhulu treatment plant, which treats high-grade gold mine dumps, was commissioned in 2018, while the Evander 8 Shaft Pillar project produced its first gold in August 2019. The 8 Shaft Pillar is set to reach commercial production in the next few weeks and steady-state production around March 2020.

In the operational update for the six months, Pan African Resources said as a result of these new operations, it is on track to deliver 185 000 ounces of gold for full-year production, despite a production decline at its older Barberton underground mines.

“The first six months of the year saw higher production from Pan African’s high-margin operations and investment in our growth projects,” said the company in a statement, before adding that it has an attractive project pipeline.

Elikhulu tailings retreatment plant specifically increased its gold production by 91.6% to 29 301 ounces after processing 6.2m tonnes of mine dumps in the period under review.

Barberton underground mines and treatment plant on the other hand produced 47 356 ounces of gold, a 6.3% reduction from 50 556 in 2018. The company blamed community unrest in July 2019 for the decline in production, and said it was pursuing legal action against instigators. But it said Barberton remains on track to produce approximately 100 000 ounces for the full 2020 financial year.

Pan African Resources is yet to present its full interim results, where it will detail financial performance of all operations, but it indicated that the whole group’s gold sales increased by 14.7% to 92 941 ounces compared with 81 014 ounces in the six months to December 2018.

The gold producer has also finalised a mining feasibility study for another new project; the Evander Mines’ Egoli, which is expected to have initial “life-of-mine” span of approximately nine years. Egoli is forecast to produce approximately 90 000 ounces of gold per annum at peak production levels.

Another project in Barberton, a sub-vertical shaft project at Fairview Mine, is also in progressing and is expected to produce an additional 7 000 to 10 000 ounces od per annum once complete. The company has been investing in SA mines while peers like Sibanye Gold are closing shafts.



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