Pan African Resources reports record profits and plans for growth amid rising gold prices

Gold producer Pan African Resources is banking on its low-cost South African operations and higher bullion prices to deliver another strong year with increased dividends for shareholders.

In the year ended June 2025, Pan African boosted gold production, with revenues climbing 44.5% to $540 million. Profits for the year consequently soared 78.4% to a record $140.6m, while headline earnings per share strengthened 41.9% to 5.89 US cents.

Now, the company is pushing ahead with capital projects in South Africa and expanding its footprint in Australia.

This is expected to further drive growth in earnings, production, and dividends, said Cobus Loots, Pan African Resources’ CEO, on Monday.

“In this gold price environment, and with the cash we are generating, it makes sense to spend some of the capital now,” Loots told investors.

The company’s all-in sustaining costs were trending down thanks to strong operational performance and careful capital allocation.

As a result, production is forecast to rise by about 40% in the next financial year, with new infrastructure — including a pump station and expanded tailings retreatment facilities — supporting output growth.

Pan African has also accelerated capital spending into FY26 to create “flexibility” and extend mine life.

The company is targeting annual production of around 260 000 ounces. It also intends to boost efficiencies through renewable energy projects and water recycling.

Pan African has already cut emissions and plans to be majority-powered by renewables within the next year.

Recently, the company said its shareholders were well-positioned to benefit from the extremely attractive gold price in FY26.

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

Loots believes 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.” 

He also noted a sustained rise in gold reserve accumulation by central banks.

Moreover, the rand has “been fairly stable, partly due to a weak US dollar,” while “South African inflation is well-managed,” further boosting prospects for the current year.

Loots confirmed that Pan African is proposing an 80% increase in its dividend at its annual general meeting in December, with payouts expected before year-end. The company is also maintaining its share buyback programme.

Loots added that the group remains focused on South Africa, where it sees long-term growth potential, but is also advancing its position in Australia with a capital budget of about $30m for projects there.

While Pan African continues to evaluate copper-gold opportunities, Loots stressed the company is in a “great position” and does not need acquisitions to grow.

Concurrently, the group is preparing to shift its listing from London’s AIM to the London Stock Exchange’s main market by year-end, while retaining its primary listing in Johannesburg.

“FY26 will be another year of growth delivery. We will keep our focus on safety, on meeting production and cost guidance, and on generating sustainable returns for shareholders,” Loots told shareholders.

Net cash generated from operating activities during the year to June rose sharply to $154.9m, compared to $64.1m the previous year, as net debt increased to $150.5m from $106.4m.

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

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