Pan African Resources share price surges as gold production jumps 51%

Pan African Resources share price shot up over 5% Monday morning after it announced gold production was up by more than half in a market where the yellow metal price is hitting new highs.

The mid-tier JSE and London mining group said Monday in an operational update for the half-year to end-December 2025 that it also wished to initiate the payment of a half-year dividend - a 12 cents per interim dividend was proposed.

"Pan African's safety, operational and financial performance in the first half, together with the boon of record gold prices, has positioned us to deliver outstanding results for the full year. During the first half the group de-geared its balance sheet, and is also boosting cash returns to shareholders," said CEO Kobus Loots.

The high gold price has meant that the group also plans to fully repay its debt by the end of February 2026, this in spite of a record annual dividend being paid in December, 2023, the group said in the update.

Net debt had already fallen by more than 65% by the end of the first half. Debt stood at $49.9 million compared to $150.5m in June 2023.

Gold production for the half year increased by 51% to 128 296 ounces and further production increases were expected in the second half.  The group was on track to meet production guidance for the full year of between 275,000 ounces and 292,000 ounces.

"The half year results demonstrate the success of our strategy of focusing on high-margin, long-life tailings retreatment operations, and also the acquisition of the very prospective Tennant Mining in Australia. We also wish to commend the Evander management team for the turnaround of the underground operation, with further improvements expected in the period ahead," said Loots.

Production at Evander operations improved substantially by 87% to 21 640 ounces, with the subvertical hoisting shaft operating at capacity and mining in the high-grade Kinross Channel of the Kimberley Reef.

Evander's second half production was expected to increase further. The Elikhulu Tailings Retreatment saw production increasing by 14% to 29,450 ounces. Mogale Tailings Retreatment (MTR) operations were at steady state throughput following ramp-up in the 2025 financial year, with production of 21 729 ounces, about 10% lower than expected, as a result of mining grades and recoveries impacted by the current mining area.

MTR expansion to 1 000ktpm was successfully commissioned in December 2025, with increased capacity and improved recoveries expected to increase gold production in the second half of the 2024 financial year.

Going forward, annual production from MTR was expected to be between 55-60 thousand ounces per year. Barberton Mines underground production increased by 5% to 32 774 ounces and BTRP production remained stable at 7 143 ounces versus 7 544 ounces in the first half of the 2025 financial year.

Tennant Mines achieved steady state throughput, with production of 15 560 ounces, including gold equivalent ounces from the sale of copper concentrate. Second half production was expected to increase to about 30 000 ounces as higher-grade ore from open pits replaced lower grade feed from the Crown Pillar Stockpile (CPS).

The second half average expected recovered mining grade was planned at 2.22g/t versus 1.15g/t in the first half.

All in sustaining cost (AISC) of production for first half of 2024 was expected in the range of $1 825 per ounce and $1 875 per ounce, which is above the full year guidance of $1 525 per ounce to $1 575 per ounce.

AISC was negatively impacted by the strengthening of the dollar rand exchange rate by 6.1% to US$17.37, with an impact of about $115 per ounce. Other factors included an Increase in employee share-based payment expenses, as a result of an increase of more than 140% in the company share price from une 30, 2025 to January 2, 2026.

Third party material processed at the Evander and MTR operations during the period Increased royalty payments due to the higher gold price received. The increased gold production guided for the second half was anticipated to reduce unit costs of production.

On future growth prospects, the directors said that a feasibility study to process the group's Soweto Cluster Tailings Storage Facilities (TSF) was completed during the period.

A 600ktpm Soweto Tailings Retreatment (STR) circuit at MTR was identified as the preferred option to process the Soweto TSFs, due to a lower upfront capital requirement, a shorter construction period, reduced permitting obligations and expectations of superior financial returns.

The Definitive Feasibility Study for this option was expected to be completed by June 2024, with a final board decision to commence project construction expected shortly thereafter.

The anticipated construction period is about 24 months. The expected annual gold production was 30-35koz for about 15 years, at an all-in-sustaining-cost (AISC) of between $1 000 per ounce and $1 200 per ounce, which will increase production from the MTR complex to about 100,000 ounces per year, once construction is complete.

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