New look Pan African puts out solid earnings

JOHANNESBURG (MINEWEB) - Pan African Recourses CEO, Ron Holding, called for “cool heads” in order for sustainability to prevail in SA’s mining sector which has been in a turbulent period over the last three years.

In an interview with Mineweb following the release of the company’s interim results for the year ended December 31 2013, Holding said he is confident the sector will rise above its current difficulties with labour relations.

Holding said Pan African had maintained a very good relationship with its employees and trade unions.

The company posted a solid set of interim results which saw headline earnings per share increase to 31 percent. Revenue was up from R70 million the previous year to R1.3 billion, the company said.

The company posted a 65.6% increase in taxed profit to R275.9m for the six months to the end of December, from R166.6m in the same period a year earlier.

Holding added that Pan African was well positioned to take advantage of acquisition opportunities that the current climate is creating after it acquired Evander Mining in Barbeton Mpumalanga province.

Pan African more than doubled its gold production to 100,172oz compared to 44,926oz last year.

Pan African has performed relatively well in a period where the Rand gold price was 8.5% lower than the comparable period in 2012, according to analysts.

According to the group, Evander Gold Mines is now fully assimilated and is performing as projected.

Nicholas Stein, an Equity Analyst at Coronation Fund Managers said PAN have performed very well relative to peers.

This can be seen by the extent to which its share price has comfortably outperformed its listed peers, he said.

“They have done a better job at growing low cost ounces and have some of the lowest cost mines in the country. They have also managed their labour relations very well, as evidenced by the fact that they have not had any material labour incidents to date,” he explained.

“Barberton production was steady with a reasonable cost performance. They did a great job landing the BTRP on time and on budget and it has started producing some very low cost ounces. Evander is facing challenging conditions as it moves into a lower grade section of the mine,” added Stein.