The producer maintains its full-year production guidance of 195000 ounces to 205000 ounces as corrective measures at Barberton Mines is expected to boost production.
Pan African Resources yesterday said its reduced gold production for its half year can be attributed to the poor performance of the underground operations of its Barberton Mines in Mpumalanga.
Pan African Resources is a mid-tier African-focused gold producer.
In its operational update for the six months ended December 31, 2022, released yesterday the miner reported a 15% decline in gold output to 92 307 ounces from 108085 ounces in the prior year.
The underground Barberton operations experienced several headwinds including inflationary increases in labour and energy costs, increasing depth and underground travel times at Fairview Mine, and depletion of the high-grade 42 Level block at Consort Mine.
Pan African Resources said it reached agreements with representative unions to restructure Barberton Mines's underground operations.
"The Consort Mine loss-making operations are to be converted to a contractor mining model, focusing on higher grade areas with reduced overheads, while development and exploration will continue to increase future mining flexibility and production; and Fairview Mine and Sheba Mines’ operations are to be reconfigured to a continuous operations (24 hours) shift cycle with productivity expected to increase commensurately," the group said.
The group maintained its full-year production guidance of 195 000 ounces to 205 000 ounces, a level similar to that achieved in 2022, subject to consistency in Eskom’s electricity supply.
Pan African CEO Cobus Loots said: “Reduced gold production over the past half year can primarily be attributed to the performance of the Barberton Mines underground operations. We believe that the concrete measures being implemented in this operation will result in a significant improvement during the second half of the financial year and the years ahead.
"The balance of our portfolio delivered in line with expectations, despite disruptions to our electricity supply and inclement weather conditions impacting operations," Loots said.
At the Evander operation alone, electricity issues impacted production by approximately 5%, reinforcing the producer’s imperative to expand its renewable energy portfolio in the years ahead, Loots said.
The company is expected to release its financial results for the first half on February 15.
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