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Simon Brown: We're talking with Cobus Loots, CEO of Pan African Resources. These are the results for the 6 months up to December. HEP increased by 46.1%, production increased by 6.7% and cash generation increased by 130%. Mr. Kobus, thank you for taking the time. It's been a good period for you personally, and the most notable thing is that your productivity has increased significantly. What makes it so? Is it efficiency? Is it the new online mining? What has boosted that number significantly?
Loot of Kobas: Simon, most of our operations, in fact all of them, worked as well or better than we expected. As a result, production increased on the back of the recovery, particularly in our main tailings business, Ericle, which generated excellent EBITDA. It is one of the lowest cost gold producers in southern Africa, at less than $1,000 per ounce. It still has 10 years of life left. So it's a special asset.
And certainly, our continued operations in Barberton, which we introduced last year, are now realizing the benefits of that strategy. Production increased primarily at Barberton's Fairview Mine.
And the Evander – Underground team also did well. Tonnage has increased and so has production.
Certainly a great performance overall in terms of production. This obviously means lower unit costs of production. Additionally, there is a tailwind from the current rand gold price, which is nearing all-time highs in rand terms.
Simon Brown: Yes, I think you are right on that point. There are many things I would like to cover. You mentioned going all-in on sustainable costs. Again, there are really positive numbers. You mentioned that efficiency is more important than anything else. Because even though inflation has come down over the last six months, it was still at a fairly high number, 5%, 6%.
Loot of Kobas: Yes, I think it's the weaker rand that is definitely helping us in terms of the sustained cost of dollar all-in. I don't think this situation will improve in the short term. You may have your own views.
And yes, producing more units lowers unit costs. That's pretty positive.
And we definitely look forward to commissioning Mintails for some time to come as well. Because it will be the same kind of thing as Elikhulu from a production point of view.
Simon Brown: So I'm thinking not only in terms of production, but also in terms of overall sustainment costs. The tailings business is being done at really, really good prices.
Loot of Kobas: yes. It is incredible that it can be produced for less than $1,000 per ounce while processing 0.3 grams per ton and recovering less than half of it. But that's the beauty of this tailings operation. In terms of rehabilitation and green mining, they are ticking the boxes. We do a lot of land restoration and restoration work.
But because the total cost of mining and processing is so low at around R40 per tonne, we can do what we've been doing and we're very excited to have Mintail coming online. As you say, maintenance costs for the group as a whole are also considerably reduced. We expect Mintail to produce at just over $900/oz in all-in-one sustaining costs.
Simon Brown: Your Evander mine – you said it’s going well. There is still considerable development work taking place at the Evander Mine. That also seems to be going pretty well.
Loot of Kobas: You're doing well, Simon. [There are] Two major developments. The first is an underground refrigeration facility. This helps improve long-term productivity. But the important thing is that it is equipped with a sub-vertical shaft for lifting, which he plans to complete by the end of this financial year, which means by the end of June. Thus, from underground he has the capacity to lift 40,000 tons, eliminating the need for very cumbersome conveyor systems. So probably about 8 kilometers of conveyors will be eliminated, but this is not significant.
Yes, we are very excited about the future of Evander Underground. Traditionally, deep underground gold mining, which has taken place in recent years in South Africa, has been known to be expensive. But Evander currently can produce it for just over $1,200 an ounce, and that number could fall further.
Simon Brown: Understood. Deep levels usually have more.
Your Fairview mine – it has a solar power plant and is scheduled to come online around the middle of this year – it’s 8.75 megawatts. Does it help in terms of cost? Eskom is expensive for households. I think it's also expensive for the mine.
Loot of Kobas: absolutely. The first solar power plant commissioned at Evander will see group-wide unit savings of more than $10/oz, or more precisely $13/oz. So when the second 10 megawatts come online, you can expect that number to double and start to become very significant.
This is obviously in addition to all of our other efforts, including 40 megawatts of power on wheels that we plan to bring online in 2025, and a number of other developments.
Simon Brown: Exploring Sudan? Although still in the early stages, drilling is expected to be completed, possibly by the end of the year.
Loot of Kobas: Yes, we had very good results in soil sampling and everything else. The political situation is obviously something we need to monitor, but we're not very exposed, Simon. They may have invested a total of $6 million by the end of June. So we're working slowly and we're very excited about the geological potential, but we need the political situation to stabilize before we can make any major development or capital decisions in a place like Sudan. there is.
Simon Brown: I respect your opinion on that. Leave it as is.
Cobus Loots, CEO of Pan African Resources, presenting results for the end of December, thank you for your time.
You can also listen to this podcast at iono.fm.
