What have been the main highlights from Pan African Resources in the past 12 months? 

We had a record-breaking year in 2022 in terms of production and profits. However, in 2023, there was a slight pullback in production due to lower ounces produced at the Barberton mine operations. One major achievement has been converting the Barberton Mine to continuous operations, a significant improvement from running only on weekdays with 22 shifts during the week. Additionally, we are excited about the construction of the recently acquired Mintails project. This project represents an investment of approximately US$135 million and is expected to begin production by December 2024. This development will likely push our annual gold production to near 250,000 oz and reduce our Group all-in-sustaining costs. Furthermore, we are continuing to invest in the underground infrastructure at the long-life Evander operations where we have over 32 million oz of gold resources. 

Can you discuss your investments in the Block 12 concessions in Sudan, and how the ongoing conflict there is affecting your exploration strategy? 

In Sudan, we started with grassroots exploration and invested around US$5 million, which is relatively low risk compared to many other mining ventures. When the conflict began, we ensured the safety of our staff and placed our exploration activities on care and maintenance. We have recently resumed operating. The geology resembles ore bodies in Egypt and the Arabian Nubian Shield in Saudi Arabia. We plan to continue exploration to declare a maiden resource within the next 12 months. Before committing significant capital to operational development, we need clarity on the political situation and stabilization in Sudan. Fortunately, our concessions are strategically located near Port Sudan, making them well-positioned geographically.

How have the energy security challenges in South Africa impacted your operations? 

The electricity situation in South Africa has certainly posed challenges for the mining industry, including Pan African. In the last financial year, we estimate that the electricity situation cost us about 10,000 oz in production. It is a threat that we must manage, but it also presents opportunities. As a response, we have been proactively investing in renewable energy sources, including the commissioning of 10 MW solar power at Evander. We are expanding this initiative with another 12 MW at a solar plant in Barberton and a 40 MW off-site power purchase agreement. This strategic move towards renewable energy helps reduce our reliance on Eskom and ultimately lowers our cost profile. 

While we do face energy challenges, our surface projects, such as Mintails, are less energy-intensive compared to underground mines, making them more viable in this context. We are looking at wind power and other energy storage solutions to become more self-reliant and environmentally responsible. We believe that such initiatives not only benefit individual mining companies but also contribute to the overall stability of the power grid in South Africa.

Can you explain the strategy behind Mintails and how you are turning waste into a valuable asset?

Mintails is a truly exciting project for us, as it represents a sustainable and environmentally responsible approach to mining. We had the opportunity to acquire 2 million oz of gold on surface for less than US$3 million. This approach aligns with our past successes in surface tailings retreatment, such as our Barberton Tailings Retreatment Plant. The US$135 million investment in Mintails will lead to an average annual gold production of 50,000 oz with all-in-sustaining costs of approximately US$1,000/oz. This is an attractive proposition for us, especially considering the extended 20-year life of the project and a payback period of under 4 years at current estimates. Beyond the economic benefits, we are committed to rehabilitating and cleaning up the land and water, creating economic opportunities and employment in the local communities. It is a win-win situation for all stakeholders involved.

What are the key priorities for Pan African Resources in the near future? 

Our key priorities include delivering on our production and cost guidance for the upcoming year while maintaining a strong emphasis on safety. The commissioning of Mintails in the next year is a major catalyst for us and will significantly contribute to our growth and also have other internal projects like Royal Sheba in development. We are committed to continuing to pay an attractive dividend to our shareholders, and look forward to declaring a maiden resource in Sudan within the next 12 months.