Pan African Resources (PAF.L) has released its production results for the financial year 2022 which ended in June. The total production for the year came in at just over 205,000 ounces of gold, a 2% increase compared to the less than 202,000 ounces of gold produced in the preceding year.
Pan African was guiding for a full-year AISC of less than $1,200/oz and considering its AISC was just $1173/oz in the first half of the year, Pan African appears to be on track to deliver on this promise. And for the current financial year, PAF expects its production to be at least stable to the production of last year.
The free cash flow could be used to start working to get the Mogale Gold project into production. The recently completed definitive feasibility study which includes the re-processing of the Tailings Storage Facilities of the Mintails asset near Krugersdorp. The initial capex was estimated at US$161M and this should result in an average production rate of 50,000 ounces of gold per year at an AISC of just over $900/oz during a thirteen year mine life (which could be extended by another eight years should PAF decide to process other tailings on the property). The pre-tax NPV was just $65M using a 9.5% discount rate. If everything works out, Pan African expects to start construction in April 2023 which should allow it to start commissioning the project in the summer of 2024.
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