Gold price not foremost focus for Pan African - CNBC Africa

Gold price not foremost focus for Pan African

Southern Africa

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Pan African Resources will focus on factors they can control on the back of a weak second quarter for gold shares, a chief executive told CNBC Africa on Monday.

 “We’re fortunate in that we’re a relatively low-cost producer at under a thousand dollars per ounce and there are things that we can do to further reduce that. Certainly the gold price is a focus of ours but we focus on those things that we can control and that is really productivity and costs,” said Cobus Loots, joint CEO of Pan African Resources.

Pan African commenced production at its Barberton Tailings Retreatment Project. Total capital expenditure for the project was 31 million dollars, 90 per cent of which has been invoiced and all of the company’s gold goes to the Rand Refinery.

 ”We’re pretty happy to have the project commissioned on time and on budget. In terms of tonnes the project will treat an estimated 100,000 tonnes of tradings per month so about 1.2 million tonnes of tradings per annum. That is expected to give us a further 20,000 ounces of gold production at Barberton per year,” said Loots.   

“The other good thing about it is that it’s expected to come in at a pretty low cash cost of around 800 US dollars per ounce, which I think in this environment is very good and it will serve to reduce the weighted average cash cost of Barberton and of our operations,” he added.

 Loots indicated that, based on past experiences, a weaker currency does help but its inflation that the metals producer has to watch out for.

 “When we look at our gold price, it’s a rand-gold price that we receive; all our costs are in rands and generally most of our capital. It’s giving us a boost at the moment. One concern that we have is a weaker rand translates into inflation over the medium to longer term but in the short term it is positive for us,” he said.  

 Pan African shares soared almost seven per cent early on Monday as the precious metals producer poured first gold from its Barberton Tailings Retreatment Project. The stock traded at 6.81 per cent up at 2.04 rand, compared to a more than 1 per cent rise in the JSE's Gold Index.

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