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Pan African Resources expects to be ‘materially’ unhedged by February

ALN

Pan African Resources PLC said on Thursday it expects to be ‘materially’ unhedged by February, in a move aimed at gaining exposure to the spot gold price.

The Rosebank-headquartered gold producer also stuck to its annual production guidance for the financial year ending June 30, 2025 of 215,000 ounces, up around 16% from 186,039 ounces a year earlier.

Gold production for the half year ending December 31 is expected to be in line with output of 87,581 ounces achieved in the second six months that ended June 30, 2024. For the first half to December 31, 2023, production was 98,458 ounces.

Early production from the Mogale Tailings Retreatment operation, where production to the end of December 2024 is estimated to be about 9,000 ounces, has offset lower production at Evander in the first half of the 2025 financial year due to the delay in the commissioning of Evander Mines’ subvertical shaft.

Pan African commissioned Mogale tailings retreatment operation early in October.

For the 2026 financial year, Pan African predicts production, excluding Tennant Consolidated Mining Group Pty Ltd, of between 235,000 ounces and 250,000 ounces.

Pan African said it had completed its acquisition of Tennant for $54.2 million in an all-share deal.

It said it expects to be ‘materially’ unhedged by February 2025, allowing increased benefit from the spot gold price. At prevailing gold prices, the group anticipates it will be fully de-geared in the next 12 to 18 months.

Late in October, gold hit an all-time record high just above $2,290 an ounce. It currently stands at $2,717.

‘By March 2025 Pan African will also be largely unhedged, and at prevailing gold prices, the cashflow generation from our long-life portfolio of quality assets should allow for rapid de-gearing and flexibility in deploying capital on value-accretive growth and further sector-leading dividends to shareholders,’ Pan African Chief Executive Officer Cobus Loots said.

In Johannesburg, Pan African shares were up 4.2% at R 8.98 on Thursday. They were flat at 34.40 pence each in London.

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