14th Apr 2020 12:00
(Alliance News) - Pan African Resources PLC on Tuesday said it has obtained government authorisation for reduced-scale surface re-mining and processing activities in South Africa despite the ongoing lockdown.
Shares in Pan African were up 8.3% in Johannesburg at ZAR2.60, and up 8.3% at 11.32 pence in London.
The company noted the South African government's decision to extend the lockdown period another two weeks beyond the initial 21-days, meaning the lockdown will stay in force until the end of April. It said it is committed to government efforts aimed at containing the spread of Covid-19 and will continue its preventative measures at all operations, whilst also continuing with essential services.
Pan African explained that "as part of these essential services", it has been given authorisation by the South African Department of Mineral Resources & Energy for "surface re-mining and processing activities on a reduced scale".
Included in this authorisation are Pan African's Barberton and Elikhulu tailings retreatment plants as well as "limited underground mining operations at Barberton mines".
"The group surface operations are currently operating at approximately 70% of normal production capacity, but with a much reduced workforce. Operating with such a reduced workforce is possible, for a limited time, as a result of the highly automated nature of the surface operations. Barberton mines is currently also able to produce the required minimum feed for its BIOX processing plant, thus ensuring the continued integrity of this system. Of the group's total staff and contractor complement, only 26% (excluding security staff) are involved in rendering essential services at these operations," Pan African explained.
The company added that: "Updated guidance for the 2020 financial year will be communicated to shareholders after the national lockdown has terminated, and once the group is in a position to quantify the extent and duration of the operational disruptions during this time."
Pan African noted its credit approval from Rand Merchant Bank to defer the last three tranches of its existing gold loan's redemption - consisting of 5,000 ounces worth around USD7.8 million - to the first quarter of its 2021 financial year. Its banking consortium has also expressed that it would provide support if the need for further liquidity arose.
Chief Executive Cobus Loots said: "We are fully supportive of the actions announced by President Cyril Ramaphosa to reduce the impact of the Covid-19 pandemic, while at the same time implementing support measures to assist stakeholders around our operations. The health and well being of our employees and communities remains our number one priority, and the measures that we have implemented enable essential services and operations to be maintained."
By Anna Farley; [email protected]
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