JOHANNESBURG (miningweekly.com) – Gold mining company Pan African Resources said on Wednesday that it had reconfigured its gold operations for sustainable profitability through the creation of a lower cost base and the imposition of efficiencies and stability through restructuring.

The London- and Johannesburg-listed company, which reported lower gold production of 160 444 oz in the 12 months to June 30, is guiding output of a lower-cost 170 000 oz in its current financial year. Profit after taxation from the group's continuing operations was R202-million, compared with last year's R700.6-million.

“We’re confident the group is now positioned as a lower-cost, long-life gold miner, consistent with stakeholder expectations and our key strategic objectives, Pan African CEO Cobus Loots said in a release to Creamer Media’s Mining Weekly Online.

Producing assets are currently generating positive cash flows through the production of low-cost gold ounces, the company said.

Identified as a key highlight in the 12 months to June 30 is the pre-schedule pouring of the first gold by the R1.7-billion Elikhulu tailings retreatment plant within the projected budget.

Elikhulu is now expected to be a flagship operation within Pan African’s low-cost, long-life asset base.

Moreover, a challenge-alleviating regrind mill at the Barberton tailings retreatment plant is now enhancing processing efficiency and Barberton Mines’ sub-vertical shaft project at Fairview is expected to facilitate improved future access to the high-grade Fairview 11-block Main Reef Complex orebody.

On the safety front, one-million fatality-free shifts milestone has been attained and progressive stakeholder engagement at Barberton Mines is kindling hopes of minimal operational stoppage. Barberton Mines experienced 58 lost production days in the period, owing to industrial action and community unrest.

The promising Royal Sheba project at Barberton Mines is providing potential short- and medium-term access to low-cost near-surface underground ounces.

Following the difficult but necessary decision to cease large-scale underground mining activities at Evander Mines’ 8 Shaft, the Egoli project at Evander Mines is presenting itself as a potential standalone project.

Difficulties in the 12 months to June 30 have precluded a final dividend from being declared, but the board is confident the benefit accruing from portfolio repositioning at the prevailing rand gold price will enable the company to resume its attractive dividend flow in the near future.

“We’ve started the 2019 financial year well, and we’re on track to achieving our production guidance of 170 000 oz,” said Loots. 

During the 12 months ended June 30, 1 635 employees were retrenched at a cost of R161-million as a result of the closure of two Evander underground operations as well as the run-of-mine circuit in the Kinross metallurgical plant; Elikhulu is now serving as a safe, low-cost and long-life alternative.