Pan African calls time on rampant gold theft at Sheba mine
PAN African Resources said it had “had enough” of rampant gold theft and declining productivity at its Sheba mine in Mpumalanga which it is now restructuring.“It’s time for a reshuffle. It’s time for a restructuring,” said Cobus Loots, CEO of Pan African in an interview today. “I want no more theft and no more unsafe mining. We need mines that are contributing and Sheba is not contributing and it’s not sustainable,” he added. The mine employs between 700 and 800 people.In a presentation earlier on Wednesday Loots said the company had caught 60 people involved in gold theft and suspected the activity to be many more. It comes amid reports of illegal trespassing of hundreds on the mine premises in recent times.“We are at a sensitive time with unions and it’s a process we have to go through,” he said of a section 189 notice issued to Sheba staff. Commenting on next steps, Loots said Sheba would share infrastructure with neighbouring Fairview mine.Gold production from Sheba fell 13% to just over 8,000 ounces in the six months ended December. Combined with the Barberton and Consort mines, which all form part of Pan African’s Barberton Gold Mines, all-in sustaining costs were $2,959 per ounce, lossmaking even at the currently elevated gold price.This compares to average AISC of $1,466/oz at Pan African’s “lower cost mines” including its surface remining at Mintails and Elikhulu which comprises about 86% of production.The sharp difference between costs between Pan African’s older underground mines and its newer surface or near-surface operations has raised questions from analysts as to whether the time is ripe for a portfolio adjustment.“We have the two kids that we love [Barberton Gold Mines and Evander Gold Mines] where we have already allocated capital,” said Loots, meaning there was limited future capital planned for them. “We also aren’t going to be buying more underground mines,” he said. Loots added earlier that Pan African had been founded on Barberton and Evander.Once Pan African had ramped up production at its newly acquired Nobles mine in Australia (to as much as 60,000 oz/year) and Mintails (50,000 oz/year with potential to go to 60,000 oz/year), roughly 65% of Pan African’s production would be from low cost, surface assets.As guided in a trading statement earlier this week, Pan African reported a 43% decline in interim headline earnings partly owing to an accounting wrinkle related to completed sales and production. As a price for gold to bullion banks had not been agreed, Pan African is not entitled to report a portion of its interim production.The company also suffered a $17.4m opportunity cost related to a gold hedge over 25% of group production which was recognised at the headline level.Net debt ballooned to $228.5m as of December 31 compared to $64.3m, an increase related to its Mintails project. Based on a current gold price Loots believed Pan African will have largely removed its net debt in 12 to 18 months.The post Pan African calls time on rampant gold theft at Sheba mine appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com
Quelle: Mining.com
