JOHANNESBURG (minignweekly.com) - Dual-listed Pan African Resources' gold production reduced by 6 331 oz to 85 282 oz for the six months ended December 31, 2017, owing to operational challenges at its Barberton Mines.

Underground production at Barberton Mines was impacted on by delays in developing into Fairview's high-grade 272 and 358 platforms, as well as 11 production days that were lost owing to industrial action by employees and protests directed by community pressure groups. As a result, gold production fell by 8 601 oz to 40 611 oz.

"The past 12 months have been a watershed period, during which we reassessed the sustainability of all our operations and dealt with the issues causing operational disruptions," said CEO Cobus Loots.

However, the company still reported an improved overall operational and financial performance from Evander Mines, while noting that its Elikhulu tailings retreatment plant project remained on track for commissioning early in the 2019 financial year, ahead of schedule and below budget.

Evander Mines returned to profitability, with underground gold operations delivering an improved performance, marked by an increase in sales to 32 734 oz, owing to tonnages milled from underground mining increasing by 7.6% to 174 233 t, with the head grade increasing by 13% to 6.1 g/t.

"While we still have some work to do, we are confident our operations are being positioned to deliver into our objective of mining relatively low-cost, high-margin and sustainable gold ounces.

"In light of the prevailing low rand gold price, the group is reviewing its cost base and the strategic merits of our portfolio. We expect to deliver improved production results and cost savings in the next reporting period," Loots highlighted.

The group's production guidance for the current financial year is now 177 000 oz to 181 000 oz.

EARNINGS
Owing to the operational challenges experienced during the interim period, Pan African expects its earnings a share to be between 70% and 90% lower than the 16.58c it reported in the first half of the prior financial year.

Headline earnings a share are also expected to fall by between 68% and 88% from the previous reporting period's 16.32c.