Pan African’s earnings double
Pan African Resources doubles half-year earnings after recovering from problems at its Evander Mines.
|||Johannesburg - Pan African Resources, a South African precious metal producer, yesterday doubled half-year earnings after recovering from problems at its Evander Mines.
The Pan African share price remained unchanged to close at R2.80 on the JSE yesterday, as the producer posted a 129.4 percent increase in earnings to R227.6 million from R99.2m in the previous comparative period.
The Johannesburg- and London-listed company said group revenue increased by 29.4 percent to R1.57 billion in the six months to December.
Group gold sales increased by 17.4 percent to 101 797 ounces up from 86 675 ounces last year.
Chief executive Cobus Loots said yesterday that the company had delivered important operational improvements at Evander Mines, with gold sales and revenue increasing significantly. “The Evander Mines Tailing Retreatment Plant (ETRP) has assisted our production growth and continued focus on low-cost, high-margin gold ounces,” Loots said.
The company said the ETRP was a success with the project commissioned on time and within budget last February. It had provided organic growth of about 10 000 ounces of additional gold production per annum at Evander Mines.
Gold sales at Evander Mines rose by 34.4 percent to 45 350 ounces from 33 733 ounces in the previous period due to the underground mining operations increasing production, while the ETRP provided an additional 3 708 ounces from zero in 2014 from tailings sources.
The company said it remained committed to ensuring a safe and productive environment and continuous improvement in safety performances remained critical.
Pan African said it was able to settle all wage demands at operational level with agreements ranging between two to three years, providing the group and stakeholders with a level of certainty in this regard over the medium term. The group’s salaries and wages increased by 9.4 percent to R497.6m from R455m last year.
Pan African Resources said it had committed R200m in the financial year to Oakleaf Investments Holding and Shanduka Resources, the black economic empowerment shareholder in Pan African, for the acquisition of the Uitkomst Colliery in KwaZulu-Natal.
“The colliery transaction remains subject to ministerial approval, following which the team will prioritise the integration of the mine into the group. The colliery is profitable and cash generative and the opportunistic acquisition provides a coal asset with a 28-year life of the mine,” the company said.
Pan African Resources’ strategy was “to continue growing both organically and through acquisitions which are value accretive to our shareholders, while maximising margins from current operations”, it said.
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