en.Wedoany.com Reported - Pan African Resources (listed in London and Johannesburg) disclosed in a fiscal year operational update sent to Mining Weekly on June 1 that the definitive feasibility study (DFS) for the Soweto Cluster is expected to be completed within this month. The study focuses on constructing a new tailings treatment facility with a monthly processing capacity of 600,000 tonnes adjacent to the Mogale Tailings Retreatment (MTR) surface gold operation. If operated independently, the project is expected to produce 30,000 to 35,000 ounces of gold annually, with a service life of 15 years. The company's gold production target for the current fiscal year is a 40% increase to 275,000 ounces.
CEO Cobus Loots stated that the company's safety statistics have improved, with a continued focus on safety initiatives. The MTR operation contributed a 14% increase in half-year gold production, reaching 147,000 ounces. Strong production performance from the Elikhulu Tailings Retreatment Plant and the Evander and Barberton underground operations offset the slower-than-expected ramp-up at the Tennant Mines acquired in Australia. Plans to expand annual gold production to 300,000 ounces and above are progressing. All-in sustaining costs (AISC) are expected at $1,870 per ounce, with this estimate accounting for inflationary overshoots in reagents, electricity, and other key inputs. The company's financial position is at its strongest in history, with record operating cash flow generation, an expected cash holding of $220 million, only $49.7 million in domestic medium-term notes as outstanding debt, alongside significant growth investments and shareholder dividends.
Production growth in the coming years is primarily expected from the Tennant Mines and MTR operations. Environmental approvals and water license applications for the Soweto Cluster are being processed, and the pipeline easement from the Soweto tailings storage facility to the Mogale plant is being finalized. A study on expanding the Mogale plant to add a separate circuit for processing local surface hard rock ore is nearing completion, which could add an additional 20,000 to 30,000 ounces annually to the Mogale complex. Loots noted in the statement that strong operational performance from the South African portfolio offset the slower ramp-up at Tennant. In the next fiscal year, the Tennant Mines are expected to see significant improvement due to full-year mining of the high-grade White Devil deposit, with plans to grow Australian gold production to 100,000 ounces annually over the next three years. He added that despite inflationary pressures, costs remain well-managed, all South African operations have stable grid electricity, and the company is accelerating the rollout of a renewable energy portfolio to sustain supply and mitigate the impact of rising Eskom costs. In Australia, although rising diesel prices have impacted production costs, the company has established sufficient storage facilities to minimize the risk of fuel supply shortages and has invested in a large-scale renewable energy solution with battery storage for the Tennant Mines to reduce future operating costs. The completion of the Emmerson transaction will enable Pan African to consolidate the Tennant Creek gold mine, and the company will list on the Australian Securities Exchange (ASX) after the transaction is implemented. The company looks forward to reporting final results for the year ending June 30 around September 16, 2026, when further details on growth projects and ESG initiatives will be provided.
Elikhulu's first-half production is estimated at 27,000 ounces, with full-year expectations exceeding 56,500 ounces. The Barberton Tailings Retreatment Plant (BTRP) is expected to produce 13,000 ounces for the full year, down from 15,224 ounces last year but in line with the mine plan. The company has approved an investment of $5.9 million to add a flotation circuit to improve recovery rates, which will also enable BTRP to process refractory ore types in the future. The company is also studying the installation of a crushing circuit at BTRP to process hard rock from Royal Sheba. The Evander Mines underground complex is estimated to produce 25,000 ounces of gold in the second half, a 16% increase from the first half, with full-year expected production of 47,000 ounces, up 68% year-on-year. The average recovery grade at Shaft 8 has increased to over 11 grams per tonne, compared to 6.8 grams per tonne in the same period last year, benefiting from mining advancing into the adjacent 24 Level A-raise lines. These two raise lines will provide the majority of ore tonnage processed at Evander Mines in the 2027 fiscal year. Development of the 25 Level portal haulage is on schedule, and more surface material from third parties is being processed through a dedicated circuit within the Evander Mines Kinross metallurgical plant, expected to yield approximately 3,000 ounces of gold. The Barberton Mines underground operation is expected to produce 39,500 ounces in the second half, with full-year production increasing by 5% to 72,000 ounces.
Total capital expenditure for the current fiscal year is expected to be $180 million, including $10 million for accelerated development of the White Devil deposit at the Tennant Mines, $8 million for constructing a solar power plant at the Tennant Mines, and $3 million for completing the feasibility study for the Soweto Cluster DFS. The group's capital expenditure guidance for the 2027 fiscal year has been raised from the previous $267 million to $324 million, with the increase primarily used to accelerate White Devil open-pit development, install a fixed crushing circuit and filter belt at the Nobles plant to support growth, and expedite exploration. Additionally, construction costs for renewable energy projects have been finalized and incorporated into the revised expenditure. In response to ongoing instability in the Middle East, all South African operations have secured a rolling three-month supply of cyanide, and the Tennant Mines site stores a one-month diesel reserve. Exploration strategies focus on converting inferred mineral resources into mineral reserves, identifying extensions of known deposits at Tennant, and drill testing new targets. Key activities include collecting 6,000 soil samples at up to 13 anomalous targets, and diamond drilling and reverse circulation drilling programs at the Chariot, Golden Forty, Juno, and White Devil deposits. The acquisition of Emmerson consolidates the company's position in the Tennant Creek field, with 100% ownership achieved upon transaction completion and the elimination of existing joint venture arrangements. The company has also made a 15% investment in ASX-listed CuFe, amounting to A$15.35 million, focusing on synergies between CuFe's Gecko and Orlando projects and Pan African's Warrego project (the largest copper-gold resource in Tennant Creek). CuFe has committed to establishing a technical working group with Pan African representatives to investigate potential synergistic benefits.
This article is compiled by Wedoany. All AI citations must indicate the source as "Wedoany". If there is any infringement or other issues, please notify us promptly, and we will modify or delete it accordingly. Email: news@wedoany.com
