JOHANNESBURG (miningweekly.com) – The London- and Johannesburg-listed Pan African Resources is able to operate and to grow in South Africa – “and do so very successfully”, an upbeat CEO Cobus Loots stated emphatically on Wednesday when he reported that a full feasibility study on the Soweto Cluster tailings storage facilities (TFSs) is expected to be completed by September to extend still further the life of the below-budget, ahead-of-schedule Mogale Tailings Retreatment (MTR) operation, which is thriving west of Johannesburg.

“We’re growing profitable production very materially. We expect to be well north of 200 000 oz of annual production in 2025,” Loots said of Pan African as a whole during the interim results presentation covered by Mining Weekly. (Also watch attached Creamer Media video.)

Amid the stunning below-two-year payback of the MTR project and an under-three-year expected payback of the Tennant Consolidated Mining Group (TCMG) gold/copper project – which Pan African Tennant Mining Operations MD Peter Main described as “a gamechanger” – it was made patently clear that there is no chance that the current restructuring of the Sheba mine in Barberton will result in closure.

The full Soweto Cluster feasibility study is focusing on the possibility of constructing a new processing facility, which would be a standalone operation, also producing about 50 000 oz/y, as is the case with the highly profitable MTR, where studies could result in that output being lifted to 60 000 oz/y in the next year.

It is envisaged that this could be achieved through installing additional reactors to further improve recoveries. It could involve the addition of two carbon-in-leach (CIL) tanks to increase throughput to a million tonnes a month from 800 000 t a month.

Being studied, too, is the inclusion of a hard rock crushing circuit enabling the processing of nearby remnant hard rock resources.

The potential inclusion of additional proximal TSF resources that add still further the Soweto project’s life-of-mine is also under scrutiny.

Impressively under way are renewable-energy initiatives to provide an estimated 100 MW of decarbonised power by 2030. 

Energy plants at Fairview and Evander Phase 1 are generating some 21 GWh of solar power, which realises a half-year financial saving of $2.1-million and cuts out 19 000 t of Scope 2 emissions.

A feasibility study has been completed for yet another solar renewable energy plant, this time one of 20 MW, with applications for environmental authorisations and permitting in progress.

In addition, several energy efficiency optimisation projects have been embarked upon at operations, realising $0.3-million in half-year savings and avoiding 3 000 t of emissions.

Evander's water treatment plant will be expanded to supply up to 5.5 ML/d from the current 3 ML/d, with construction work to expand the plant commencing during 2025.

Rehabilitation at MTR's Mogale and Soweto sites is already in progress, with several wetlands restored.

The group is on target to rehabilitate 85 ha for financial year (FY) 2025 and closure liabilities are materially funded, with a relatively modest shortfall of $5.2-million related to the MTR closure.

At TCMG Down Under, construction of the Nobles Gold CIL processing plant is ahead of schedule and within budget, with first gold now expected in the last quarter of FY 2025.

Despite all the capital that Pan African has invested, the strongly advancing company remains able to maintain sector-leading dividend payouts to shareholders and is considering an interim dividend in the next year amid being able to grow production by almost 50% in a short space of time.

“What’s very helpful is that our assets have extended lives. We don’t have to go and acquire more assets to maintain and grow production, and we’ve pretty much spent all of our significant growth capital,” said Loots.

Importantly, Pan African’s aspirations come second to balancing social and environmental considerations, with rehabilitation of historic mine sites uplifting the livelihoods of local communities considerably and improving air and water quality markedly.

The underground Evander mine, which hosts one of the world’s largest unexploited gold deposits, is providing ongoing life-extending material to enable the Elikhulu Tailings Retreatment Plant, ‘The Big One’, to live up to its name.

With Barberton mining rights valid until 2051, a five-year wage agreement, plus the latest solar power commissioning, point to ongoing returns from the area’s high grade underground mines, and Barberton Tailings Retreatment Plant surface operation.

In an excellent position to capitalise on high margins and growing production, Pan African will be largely unhedged from March and completely degeared in the next 12 to 18 months.

Gold production for the six months ended December 31 was 84 705 oz, with full-year guidance for FY 2025 expected to hit a 16%-higher 215 000 oz amid Evander’s subvertical hoisting shaft being fully commissioned in January.

All-in sustaining  costs (AISC) for the half-year were $1 675/oz, up on last half-year’s $1 295/oz. AISC guidance for the second half-year are expected to be between $1 450/oz and $1 500/oz, with the expected cost reduction stemming from improved underground performance plus a full year of MTR  production, FD Marileen Kok outlined during the presentation of interim financial results for the six months ended December 31.

Half-year revenue was $189.3-million and profit was a 10%-higher $44.6-million.

Net debt increased to $228.5-million, primarily as a result of the construction of the MTR operation and the consolidation of debt acquired as part of the TCMG acquisition.

A net dividend of $23.7-million was paid to shareholders in December.

What is highly regrettable is that a fatality occurred on December 30 following an underground mud rush at Evander 7 shaft.