Pan African Resources considers interim dividend as gold soars

Mid-tier gold producer Pan African Resources on Wednesday announced the possible instatement of an interim dividend as the gold price climbed to all-time highs.

Speaking during the results presentation for the six months ended December 31, CEO Cobus Loots said the group has “tailwinds from the highest gold price in history”.

“This will allow a review of the group’s dividend policy after financial year-end, which could include instating interim dividend payments.”

Loots said the group will fully benefit from the prevailing spot gold price of $2,860/oz (R1,690,000/kg), which is 21% higher compared with the average price of $2,359/oz (R1,361,202/kg) in the six months ended December 31.

“We have tailwinds from the highest gold price in history and the group is materially unhedged,” he said.

The gold price rallied in 2024, hitting several records amid geopolitical uncertainty and rising inflation.

Pan African operates Barberton Mines, one of the oldest gold mines in South Africa.

Loots said Pan African is well positioned for much-improved production in the second half of 2025, with a further significant increase in production expected for 2026.

It maintained its full-year guidance for the 2025 financial year at 215,000oz, up from 186,039oz in 2024, representing a 16% increase from the year before.

The group's gold production for the six months ended December 31 fell 3.3% compared with the previous period after a delay in commissioning of a sub-vertical shaft for ore hosting at its Evander Mines.

However, the group was able to produce gold from the Mogale Tailings Retreatment (MTR) operation earlier than expected. In financials, net debt peaked to $228.5m (R4.21bn), mainly as a result of the construction of the MTR operation and the consolidation of debt acquired as part of the Tennant Consolidated Mining Group (TCMG) in Australia.

In December Pan African acquired TCMG for $54.2m (R1bn) which boasts a portfolio that includes low-risk and low-cost surface and underground operations.

Loots said TCMG had ticked the boxes given the tier-one jurisdiction.

“I think the acquisition of TCMG caught most of our shareholders by surprise, given the jurisdiction. By the time we concluded the acquisition we had spent more than a year assessing the assets and working with the local management team. TCMG ticked all the boxes in deploying capital for growth,” said Loots.

“We secured a dominant position in a gold field with a largest ever processing facility to be operated there.”. 

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