JOHANNESBURG (miningweekly.com) ­– Gold mining company Pan African Resources stated on Monday that it had increased its Covid-19 assistance to R5-million, recalled its permitted employees, updated production guidance and removed hedging from the end of June.

Headed by CEO Cobus Loots, the London- and Johannesburg-listed company last month provided R3-million worth of hygiene, water and food hampers to its 2 600 Barberton Mines employees, as well as to near-mine families and local communities around its Fairview, Consort and Sheba operations.

Now it is providing 5 400 hampers, worth close to R5-million in total, as part of its Covid-19 programme of relief and assistance.

It has also committed itself to continuing to assist its most vulnerable stakeholders in the months ahead.

In an update on group operations amid Covid-19 lockdown regulations to the Johannesburg Securities Exchange, the company stated that it has managed to keep its revised production guidance to only 5% below the previous guided 185 000 oz, owing to its ability to increase output from surface toll treatment and low-grade surface stockpile processing initiatives that substituted underground production, but at a reduced margin.

Mining Weekly can report that the recall of employees under the Level 4 lockdown regulations is now well advanced, with the surface operations at Pan African’s Elikhulu Tailings Retreatment Plant and the Barberton Tailings Retreatment Plant producing at close to full capacity from early May.

Loots viewed the restart of the South African economy as crucial: “The phased approach adopted by the government to achieve this is practical in fighting the pandemic and enabling businesses and communities to survive during this tumultuous period,” Loots stated.

He said that Pan African had implemented preventative and precautionary measures at its operations to ensure the health and wellbeing of employees as they returned to work, and looked forward to working with all stakeholders in the operational ramp-up.

He expected a long battle ahead against Covid-19, but commended employees for the manner in which they had worked together during this period.

“The strategic repositioning of our group some years ago, as a safe and high-margin producer with multiple operations and the flexibility to withstand short-term external shocks, should continue to serve all stakeholders well,” Loots added.

Under Level 4, which entails a risk-based and gradual employee recall, opencast mines and surface operations are able to operate at up to 100% of normal capacity, and underground and other mines at 50% capacity.

REVISED PRODUCTION GUIDANCE

Pan African Group suspended its original production guidance of 185 000 oz for its 2020 financial year to the end of June, as a result of the anticipated Covid-19 impact on its mining operations.

As expected, production was severely affected during the lockdown months of March and April, but the group was able to mitigate some of the impact through continued mining activities at its surface operations, which were staffed by a materially reduced employee complement, and also with limited high-grade underground mining at Barberton Mines.

Its surface gold operations functioned at 70% of normal production capacity with only 26% of the workforce.

It now expects the revised gold production for the 2020 financial year to be 176 000 oz, including capitalised production from the No 8 Shaft Pillar operation.

An output of 64 000 oz is expected from Barberton Mines Underground, 21 000 oz from Barberton Tailings Retreatment Plant, 31 000 oz from Evander Mines Underground and Tolling, and 59 000 oz from Elikhulu Tailings Retreatment Plant.

RETURNING TO BEING UNHEDGED

Having remained cashflow positive during lockdown, the company said that a 23% reduction of senior interest-bearing debt to R1.3-billion was expected as at June 30, when the group would also return to being unhedged, as its short-term zero-cost collar hedges, entered into during the course of the 2020 financial year to underpin cash flow and redeem senior debt, would have played out.