JOHANNESBURG (miningweekly.com) – Aim- and JSE-listed Pan African Resources is on track to bring its Evander shafts back into operation, 30% leaner in terms of its workforce and within the company’s 55-day safety-linked mining suspension timeline.
The group on February 20 announced the temporary suspension of underground operations at the Evander gold mine, in Mpumalanga, to complete infrastructure-critical refurbishment and maintenance on shafts 7 and 8.
Pan African in December 2016 reported that Evander’s 7A shaft was undergoing critical maintenance following the dislodgement of a steel shaft guide, which damaged shaft infrastructure. In conjunction with the 7A shaft refurbishment programme, the company had initiated independent and internal engineering studies to assess the condition of Evander’s underground mining infrastructure (shafts 7 and 8).
Pan African in February said the studies had identified critical infrastructure issues that required remedial action to ensure the safe and sustainable operation of these shafts.
The planned 55-day suspension is expected to be completed at a capital cost of about R40-million.
Meanwhile, the mine is to reduce the underground operation’s fixed cost base once mining restarts, with 30%, or 976, of the mine’s 2 400 employees having been retrenched at an estimated cost of R54-million.
Pan African explained that the retrenched personnel were designated as redundant in terms of meeting production targets, following a productivity and human capital assessment. A retrenchment agreement was reached with the National Union of Mineworkers on March 10.
“To minimise the number of job losses, Evander Mines will seek to re-engage a number of retrenched employees when site activities for Elikhulu tailings project, in Mpumalanga, commence,” the company said in an update to shareholders.
The company is pursuing construction of the project following a positive independent definitive feasibility study for facilities and infrastructure at the Evander mine to retreat gold plant tailings at a rate of one-million tonnes a month.
“The company can confirm that it has been seeking out investor support for raising equity to fund the remaining portion of capital required for the Elikhulu construction.”
The company said it was pleased with the interest it had received from investors and had built a book of demand in excess of the 291.4-million shares that it was given authority to issue at its shareholder meeting.
Given current market conditions and market volatility, however, the company has elected not to complete an equity issuance at this time. It will continue to progress the Elikhulu development from cash and banking facilities, until the final Elikhulu funding package is secured.