Pan African Resources achieves record gold production while significantly reducing debt
The announcement, however, was overshadowed by a fatal accident at its Barberton operation earlier this month.
The South Africa-focused gold producer said one employee lost their life at the Sheba Mine on June 6. The company said it will continue efforts to achieve 'zero harm' across its operations.
Despite the tragedy, operationally the company ended the fiscal year on a strong note. Gold production for the second half of 2025 is estimated at approximately 112 000 ounces, a 32% increase from the first half (84 705 ounces), driven by improved grades, stronger performance from underground operations, and the ramp-up of tailings retreatment projects. Full-year production is expected at about 197 000 ounces, a 6% increase year-on-year.
Cobus Loots, Pan African's CEO, said, "I believe the Group has never been better positioned to take advantage of record gold prices, with record second half gold production being testament to that achievement. Increased cashflow generation and de-gearing is allowing our business to continue to invest and grow, whilst also increasing cash returns to shareholders. The share buy back programme approved by our board demonstrates our confidence in the Group and its prospects."
Loots said the commissioning during May 2025 of the processing plant at Tennant Mines in Australia is a significant achievement for the group and maintains its track record of delivering new mining projects on time and within budget.
"We have also now demonstrated our ability to commission large scale projects outside of South Africa," he said.
In addition to a notable immediate increase in Pan African's production capacity, Loots said Pan African's investment in Tennant also provides for exciting growth in a Tier-1 mining jurisdiction, with some 1700 square kilometres of prospective exploration ground, and our newly established processing plant at Tennant Mines being the only such facility in the region.
Debt Falls Sharply, Share Buyback Announced
Pan African reduced its net debt by 32% to approximately $155 million (R2.8 billion) as of June 30, 2025, from $228.5m at the end of December. The company expects to be fully degeared during 2026 at current gold prices. The miner also plans to be fully unhedged from July, having exited its final zero-cost collar positions and synthetic forward contracts.
In a move to return value to shareholders, Pan African's board has approved a share buyback programme of up to ZAR200 million, starting June 17.
"The board believes that at the current share price, the company's shares offer significant value, given the quality and profitability of the group's existing operations and growth projects. The board has, therefore, taken the decision to implement the programme as part of the company's broader strategy to deliver value to shareholders," it said.
Cost Guidance Rises
The company acknowledged that full-year output fell short of guidance primarily due to slower-than-expected commissioning at two key projects: the Evander sub-vertical shaft and the tailings filter press section at the new Tennant Mines plant. Tennant, which achieved its first gold pour in May, is expected to reach steady-state production of around 50 000 ounces per annum by the first quarter of 2026.
Pan African's all-in sustaining costs (AISC) for the second half of 2025 are now forecast between $1 525 and $1 550 per ounce, above prior guidance. For the full year, AISC is expected to range between $1 550 and $1 575/oz, impacted by lower-than-planned production and a $25/oz loss from expired hedge positions.
Looking ahead, the company projects 2026 gold production between 275,000 and 292000 ounces - a 40% year-on-year increase - with group AISC expected to fall to between $1 475 and $1 525/oz. Growth will be supported by full-year contributions from the Mogale Tailings Retreatment (MTR) plant, higher production at Evander and Tennant Mines, and improved operating efficiencies at Barberton following a recent restructuring.
At midday the share price was up 0.99% at R11.26 on the JSE.
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