Junior gold miner Pan African Resources reported a 69% increase in headline earnings per share (Heps) for the financial year ended 30 June 2021 on Wednesday and slashed its net senior debt by just over 45%, to $33.7 million.
The JSE and London Stock Exchange-listed group revealed in its latest financial results statement that mining profit for the year surged to $128 million, on the back of higher commodity prices and a double-digit increase in production at its mines.
The group increased gold production by 12.4% to 201 777 oz.
It also posted a 34.6% jump in revenue to $368.9m (from $274.1 million in 2020). This is predominantly a result of gold sales increasing 16.1%.
“Our excellent financial performance has improved Heps by 69% and enabled a 45.6% reduction in group net senior debt. We remain on track with our forecast de-gearing, while continuing to invest in our assets and increasing dividends to shareholders,” said Pan African Resources CEO Cobus Loots in a statement.
Although Covid-19 disrupted mining operations, the company noted several other highlights. These include the renewal of its Barberton Mines’ mining rights for a 30-year period to May 2051; and, Barberton Mines also successfully concluding a multi-year wage agreement with its representative unions.
“The renewal of Barberton Mines’ mining rights by the Department of Mineral Resources and Energy (DMRE) for a further 30 years endorses our technical work and the long-term LoM [Life of mine] plans submitted for these Mineral Resources,” Loots added.
Pan African Resources latest financial results is in-line with the stellar performance of several other mining companies such as Amplats, which reported a 28% increase in metal production in early August.
Diversified resources group Exxaro reported a 106% leap in headline earnings per share for the half year to June, while Royal Bafokeng Platinum announced a 322% surge in gross profit.
“We are, once again, pleased to report major positive strides in Pan African’s operational and financial performance, despite the challenges of the ongoing Covid-19 pandemic,” said Loots.
Listen to Simon Brown’s MoneywebNOW interview with CEO Cobus Loots here:
“The operational flexibility afforded by our multiple producing assets has enabled the group to improve margins, achieve record profits and realise our second-highest annual gold production. We are also proposing our highest-ever dividend for approval at the upcoming annual general meeting,” he added.
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At the prevailing exchange rate, the record final proposed dividend is $28.3 million (R402.2 million).
The share price of Pan African Resources closed almost 4% firmer on the JSE on Wednesday, at R3.35. However, the stock is trading over 35% lower for the year to date.
Palesa Mofokeng is a Moneyweb intern.