Number 7 shaft
headgear at Evander
gold mine, currently
being acquired by
Pan African
Johannesburg, South Africa — 28 September 2012 – Upheavals in the South African mining industry wouldn’t deter Pan African Resources from growing its asset portfolio in the country, according to CEO Jan Nelson, even though the company claims to have enough on its plate for the time being.

Releasing annual results to end-June, Nelson said that Pan African was not looking to make more acquisitions in the year ahead, reports Miningmx.

“We’re not embarking on a shopping spree,” he said. “It’s more about bedding down what we have.” Pan African is in the process of finalising the acquisition of Evander from Harmony Gold “’ a mine that would double the company’s annual gold production profile from the current 95,000oz to more than 200,000oz.

The group is also developing a 20,000ozpa gold tailings treatment plant at its Barberton mine, due for commissioning in June 2013, while its recently commissioned Phoenix surface platinum operations are still progressing towards steady-state production.

Nelson said that the company would continue to pursue opportunities in both gold and platinum. “It’s a bit rough out there at the moment, but South Africa very much remains our focus point,” he said. “There’s still some good ore body available to be mined,” he stated, adding that he expected more assets to come to market as some of the multi-national players evaluated their options.

Asked whether Barberton and Phoenix were at risk of disruptions over labour unrest, Nelson said: “I can’t stand here and guarantee that there is no strike tomorrow. What we can do is to talk to our employees and that’s what we’re doing. So far we haven’t had any disruptions but the situation remains fluid.”

Nelson said that all shareholders would be able to take part in the R1.90/share right issue scheduled for later this year. Pan African’s biggest institutional shareholders have already committed to subscribe to R700 million worth of new shares. The proceeds are earmarked to fund the R1.5 billion Evander transaction, to be complemented by debt funding and existing cash reserves (£19.8 million at the end of June).

Pan African would take over management responsibility of Evander once its shareholders had approved the transaction – Nelson said that circulars would be posted within the next month – while the transfer of Harmony’s Eskom electricity supply agreement also had to be finalised.

During the year under review, Pan African reported a 69.17% increase in headline earnings per share to 2.03p, on the back of 27.65% higher revenue of £101.1 million. The higher prevailing gold price, as well as some cost control measures, enabled to company to improve its margin by 57.1% to US$918/oz.

Source: Miningmx. For more information, click here.