Pan African Resources boosts gold production by 28% in 2025 second half

Tawanda Karombo

Pan African Resources ramped up gold production in its 2025 second half-year to June by 28%, with overall output for the full year consequently increasing by 5.6% to 196 527 ounces against a 2026 projected bullion yield of at least 275 000 ounces.

Production during the second half amounted to 111 822 ounces, a record for the company which is moving its UK listing from AIM to London’s main market.

Through shifting to the UK main market, Pan African Resources - whose shares on the JSE inched up by 0.89% to R18.13 in afternoon trade on Wednesday - hopes to tap into a larger pool of investors and breathe impetus into its stock’s liquidity.

Its prospects have been brightened by the ramp up in gold production. Moreover, the company’s Tennant Mines in Australia achieved inaugural gold pour in May, with forecasts of between 46 000 ounces and 50 000 ounces in gold production over the next three years.

This comes at a time gold prices are currently elevated, with projections of further strengthening.

Cobus Loots, Pan African Resources’ CEO, said during a presentation of the company’s financials on Wednesday that the precious metal’s “perceived safe-haven status is likely to persist amid global geopolitical uncertainty” with seemingly “continued momentum for a reallocation towards alternatives to the US dollar as the global reserve currency” amid a rise in accumulation of gold reserves by central banks.

“Pan African and our shareholders are well-positioned to benefit from the extremely attractive gold price in FY26. The rand has been relatively stable, partly due to a weak US dollar, and South African inflation is well-managed,” said Loots.

This had helped the company, which had also benefited from “longer wage agreements linked to reasonable inflationary increases” for the group.

Nonetheless, there were drawbacks to production in South Africa in the first half.

While the South African electricity grid has been stable in the past year, with improved maintenance, an Eskom infrastructure failure in the first half year cost Pan African “dearly” in terms of output. The company lost an estimated 2,250 ounces of gold during the power outages.

After production rebounded in the second half year, Pan African lifted revenues by 44.5% to $540 million, with profits for the year soaring 78.4% to a record $140.6 million after headline earnings per share strengthened 41.9% to 5.89 US cents per share.

Net cash generated from operating activities sprung up from $64.1m the previous year to $154.9m as net debt rose to $150.5m compared to $106.4m a year earlier.

“The Group expects to be fully degeared from a net debt perspective during FY26 at prevailing gold prices. The board-approved share buy-back programme to purchase up to R200 million (approximately $11.1m) of ordinary shares in the market,” said finance director, Marileen Kok.

The new MTR and Tennant Mines operations are expected to provide further growth to production in the current year. MTR, a tailings retreatment asset in South Africa, was commissioned ahead of schedule during the half year to December, saving some $8m on the upfront project capital. 

“Australia presents a highly prospective environment for further growth. We have found the Northern Territory Government to be very supportive of our business, and we look forward to expanding our operations in the next years,” added Loots.

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