JOHANNESBURG (miningweekly.com) – Investors in the Pan African Resources gold mining company are not only exposed to what is an exceptionally high gold price but also to low-cost, low-risk, near-term production growth of considerable magnitude.

“So, it's an exciting time for us,” Pan African CEO Cobus Loots highlighted in a Zoom interview in Mining Weekly. (Also watch attached Creamer Media video.)

Reflecting remarkably rapid progress in a new mining jurisdiction, Pan African will commence gold production in Australia before the end of this financial year (FY) in June – and is looking to a stepped-up FY 2026 production number well north of 270 000 oz.

In addition, at the prevailing high gold price, Pan African should be pretty much debt-free in the next 12 to 18 months, which is a fantastic position to be in for a company that is looking forward to impressive short-term production growth.

Moreover, Mogale Tailings Retreatment (MTR), commissioned in October, is being speedily paid back, as is poised to be repeated in the case of the Tennant Consolidated Mining Group (TCMG) gold/copper project in Australia, which is already within a hair's breadth of being commissioned in game-changing fashion.

Exceptionally high environmental, social and governance (ESG) ambition is a hallmark of this Johannesburg- and London-listed company, which has a ‘going beyond compliance’ ESG mantra.

The ahead-of-schedule, below-budget gold-from-tailings MTR operation, west of Johannesburg, has been an example of that – plus some, in that MTR has proved to be just what the doctor ordered for the people of Kagiso and Krugersdorp, where rehabilitation of historic mine sites is uplifting lives and livelihoods across a broad front, improving water quality as far afield as the Cradle of Humankind, the UNESCO paleoanthropological site 50 km away, and even persuading illegal miners to throw in the towel.

On the green energy front, close to half of the electricity that Pan Africa consumes will, in the next three to four years, be clean and green, and rehabilitation of yet another of the company's upcoming gold-from-tailings prospects, the Soweto Cluster, is already under way.

“It's fair to say we’re really enjoying the exceptionally high rand gold price. We’re pretty much unhedged as of the end of February, so we are seeing all of that high gold price now coming through in terms of cash flows, so it’s a great positive for us,” an upbeat Loots commented.

“All other things being equal, 2026 will be an exceptional year from a production perspective, with a full years' production from MTR and then also from Australia.

“So, we’re seeing the 2026 production number well north of 270 000 oz, which, I guess, not many other producers can do, in terms of production growth, over such a short space of time."

Mining Weekly: What are the chances of South Africa seeing another standalone processing facility as part of the Soweto Cluster project?

Loots: We'd obviously love to grow further in the tailing space. We constructed all of MTR in 14 months, and that processing plant is doing very well, so we said to the market that we’re busy with feasibility studies, and I think we'll have quite a clear picture as to where we’re headed by September or October of this year, and definitely it could include a further Soweto plant in time.

Is the inclusion of a hard-rock crushing circuit, to process nearby remnant hard rock Soweto Cluster resources, looking feasible?

We’re still busy with our feasibility on a hard-rock circuit, but it's not a primary focus for us. We have more than sufficient tailings reserves with MTR and Soweto to keep us going for 20 years or more, so that’s really the focus.

What is the latest on the restructuring of the Sheba gold mine in Barberton?

Discussions with all stakeholders, including our unions, is ongoing, and I believe we'll be able to get everything done before the end of June, and that’ll put the Sheba operation on a much better footing.

Tell us more about your entry into Australia with the TCMG gold/copper project?

It's very exciting. We closed that transaction in December and the mills will start turning at end of April, beginning May. We’re quite comfortable that we’ll start producing gold before the end of this financial year, and, again, it's not often that you’re able to enter a new jurisdiction like we've done, and then be producing within six months, with such a lot of exciting growth, also. So, yes, we’re quite pleased with the progress that the team is making in Australia, and we'll definitely do an update in terms of the market before the end of this financial year.

You’ve got the Nobles Gold carbon-in-leach processing plant at TCMG. Is that what you say will be producing first gold in the last quarter of FY 2025?

One hundred per cent. It's a plant that has the capacity to process some 70 000 t a month, and we’re building a stockpile right next to this plant as we speak, so by the time the mills start turning, we'll have 100 000 t sitting in front of the plant, at a grade of about 1.7 g/t to 1.8 g/t.

How much more renewable-energy generation is on the cards, and what are the expected power-cost savings?

We were, if you remember, the first South African miner to commission a large-scale plant at Evander, and then we proceeded also to build a facility at Barberton. Between those, the monthly saving for the group is now about R8-million, so that’s quite material. We’re busy now with projects to construct solar at MTR and then also to expand the footprint at Evander. The idea would be to get, certainly, one of those done in the next 18 months or so, and then also, obviously, pursuing further power purchase agreements (PPAs) to increase our renewable-energy footprint even more.

What will that likely amount to in terms of total megawattage from renewables?

Currently, we have just under 20 MW installed. The plants that we're looking into at Evander and MTR are in the order of 20 MW each, and then we have a PPA for another 40 MW, so we’re pushing quite hard, during the next three, four years, to have almost 50% of our energy requirements come from renewable energy.

GROWTH PLUS DIVIDENDS

Despite the significant capital expenditure, dividend payouts to shareholders continue, amid acquisition of more assets to grow production not being currently required.

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.

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.