A higher gold price buoyed raised full year revenues in Pan African Resources by 16.8% while the company sold 4.9% more bullion during the period to the end of June.
The higher revenue and production for the period lifted up earnings in the gold miner for the year to June, it said in a trading update yesterday.
Headline earnings per share (HEPS) in Pan African Resources for the year under review are expected to be between 3.99 (US) cents 4.31 cents per share, compared to 3.15 cents per share in the previous year. This represents an increase of between 27% and 37%.
Earnings per share (EPS) for the period under review are also expected to be higher by between 25% and 35% at between 3.98 cents per share and 4.30 cents per share respectively.
The increases in HEPS and EPS for the current reporting period, relative to the previous reporting period were mainly a result of the higher revenues generated for the period, the company said.
Pan African Resources said because its presentation currency was in US dollar while the functional currency was the South Africa rand, it had been affected by prevailing exchange rate movements.
“Movements in the dollar-rand exchange rate affect the Group’s US$ reported results. The average dollar-rand exchange rate, that prevailed during the current financial year, is used in translating the group’s rand financial performance into US dollar,” it said.
During the period under review, the average US$/ZAR exchange rate averaged R18.71/$1 compared to R17.77/$1.
The closing US$/ZAR exchange rate as at 30 June 2024 stood at R18.19/$1 compared to the year earlier same period’s close of R18.83/$1.
“The year-on-year change in the average and closing exchange rates of 5.3% and 3.4%, respectively, must be considered when comparing period-on-period results.”
The company has previously said that it is maintaining its production guidance for the 2025 full year at between 215 000 ounces and 225 000 ounces, representing a significant ramp up and upside potential given currently higher bullion prices.
Construction of the Fairview Mine’s 8.75MW solar photovoltaic plant has also been completed, with final commissioning set for the next few weeks. First power generation from the plant, which is expected to provide 15% of Barberton Mines’ energy requirements, is anticipated in the next month. Pan African expects to accrue $2.4m in annual electricity cost savings.
Net debt in Pan African Resources as at the of June had increased to $106.4m compared to $22m in the prior year.
This has been attributed to “construction costs at the Mogale Tailings Retreatment Plant” which had taken up $71.5m for the period as well as expansion capital expenditure in respect of Evander 8 Shaft 25-26 Level development.
The extension of Elikhulu’s new tailings storage facility had also taken up $23.8m while $9.9m had been invested into expenditures for the Fairview solar plant.
BUSINESS REPORT