South African gold miner, Pan African Resources PLC reported an annual loss of R1.78 billion ($123 million) for the first time in 11 years.
Weaker gold prices, issues at the company’s Evander and Barberton Complexes heavily impacted its performance in the last financial year. Cobus Loots, chief executive of Pan African Resources, however, expects an improved performance after a tough year, given recent improvements. According to Loots, payment of a final dividend is a sign of confidence in the miner’s operations.
After six years of operating as a loss-making exploration company in the Central African Republic, Ghana and Mozambique, in 2007, Pan African became a gold producer. Operating through Barberton Mines, Evander Mines, among others, Pan African engages in the exploration of precious metals in South Africa.
Barberton Mines was acquired from diversified miner Metorex and since 2007, Pan African has been a profitable, dividend-paying company listed in Johannesburg and London, where it has its headquarters. The company’s primary exploration is gold ores, platinum-group elements and coal.
With a market capitalisation of R3.7 billion ($256 million), things began to go south and the miner shut the unprofitable Evander Mine it acquired for R1.5 billion ($104 million) from Harmony Gold in 2013, after it reported a R1.56 billion ($108 million) loss for the financial year ended in June. This loss was from a R310 million (21.4 million) profit the previous year.
To save cost, Pan African cut about 1,700 jobs at its Evander mine as well as taking impairments against the Evander assets worth R1.78 billion, leading to its first loss since Barberton acquisition.