Later this year, Pan African Resources (LON:PAF), the South African mining group that has spent the last six years building a gold business, will turn its hand to platinum group metals. It is a move that CEO Jan Nelson says will not only boost profits but also prove to investors the company’s ambition to build a wider portfolio of projects. As the majority owner of the 2.5 million ounce Barberton Mines gold operation, Pan African last year produced close to 100,000 ounces of gold. Since speaking to Stockopedia in September last year, Nelson and his team have begun working on plans to add another 20,000 ounces by reprocessing a tailings dam on the current site. Meanwhile, the Phoenix platinum project – a chrome tailings reprocessing operation based at International Ferro Metals’ Lesedi mine, 50 km east of Rustenburg – promises a high margin, low cost addition. Likewise, the prospect of drilling a recently upgraded potential 3 million ounce resource at its Manica gold project in Mozambique and further exploration work in and around Barberton, is enough to lead Nelson to suggest that the company could soon be owed a substantial re-rating in the price of its AIM listed shares.
Jan, clearly you have been very busy in recent months. What has Pan African been working on since the start of the year?
Jan Nelson: There has been quite a lot of work done, especially by Ron Holding, our operations manager, and his team. There is the increase in the resource and reserves at Barberton, which we are happy about; the team has spent a lot of time getting that right and there is more work going on. Phoenix, which Ron also looks after, is ahead of schedule and that is going well and then we have got this new tailings project at Barberton, which is also pretty far advanced. Then there is the news out on Manica. So yes, it is all going very well.
In February you reported a lot of improvement at Barberton, with production up, profits up and the costs were falling. How satisfied are you with the way that asset is performing?
Jan Nelson: We are very happy with that asset; we have got a very good team there. Despite some real issues on the mine in terms of criminal mining, which…
Brilliant
