16th Sep 2014 10:05
LONDON (Alliance News) - Pan African Resources PLC Tuesday said its Evander Mines acquisition completing its first full-year of production, and the company increased gold sales, resulting in increased revenue, despite lower gold prices and reduced production at some of its sites.
The company reported revenue of GBP154.6 million in the year ended June 30, compared to GBP133.5 million in the comparable period in 2013. All gold sales, which increased by 44%, were made in South Africa, and more than 90% of its revenue was generated from a single customer, Rand Refinery, it said.
The results include a full year of operations for Evander Mines, whilst the comparative 2013 period only included four months of operations, from the date that Evander Mines was acquired.
A low-grade mining cycle at Evander Mines and reduced underground production at the Barberton Mines as a result of flooding during March resulted in reduced production and profits compared to the prior year, it said. Both mines are in South Africa.
Pretax profit declined to GBP33.9 million in the full year ended June 30, compared to GBP54.7 million in its full-year ending in 2013.
"Pan African Resources is pleased with another satisfactory performance from Barberton Mines, whilst Evander Mines results were impacted negatively by the low-grade mining cycle," said Chief Executive Ron Holding.
During the course of the year, a lower average gold price was achieved when compared to the prior year, Pan African said. The group realised an average gold price of USD1,303 per ounce, a decrease of 16% from the USD1,553 per ounce achieved in the prior year, it said.
Pan African announced a full-year dividend of 0.7898 pence per share to be approved at its annual general meeting in November.
"Increased dividends and a new progressive dividend policy demonstrates the board and management's confidence in the quality of our assets and Evander Mine's future performance. Our statement of financial position remains strong, whilst cash generative assets and internal projects will provide the platform for further profitable growth," added Holding.
Pan African has approved the construction of the Evander tailing retreatment plant, which has commenced, with production expected by January 2015. If the project meets targets, it will evaluate a project to commission a further, much larger plant, it said.
Pan African is continuing its refurbishment of Fairview Number 2 and 3 decline shafts at Barberton Mines, which is expected to last another 18 months, said Holding.
"Once the above plans are actioned, we will be on track to achieve our targeted 250,000 ounces of annual production from our current portfolio of assets and infrastructure. Pan African Resources is also very well positioned to take advantage of further growth opportunities," added Holding.
Pan African's shares were up 1.8% to 14.00 pence per share Tuesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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