[miningmx.com] — TWO things jump out from the 2010 annual report of Pan African Resourcs: the successful transformation of the group and the extent to which it’s looking for potential new gold projects in the rest of Africa.
As CEO Jan Nelson rightly points out, it’s taken the company just three years to change from loss-making explorer into profitable gold producer and it’s achieved that against a pretty grim economic backdrop.
In the process it has also fought and won a war with illegal miners who at one stage threatened to take over its flagship Barberton mine.
Pan African has doubled its headline earnings over the past three years and increased gold production by 18% over the same period, during which it has also pushed up its resource base by 58% – so extending its economic life.
The company had £12,7m in the bank at end-June, is debt-free and has commenced paying an annual dividend, which Nelson says is sustainable.
Pan African’s growth will come from potential expansions at Barberton and the start of production from its Phoenix project to recover platinum group metals, which is scheduled for second half 2011.
But Nelson also reported that during 2010 his management team reviewed more than 40 potential gold projects, of which 21 were in South Africa, 12 in Zimbabwe, six in West Africa and one each in Zambia, Tanzania and Mozambique.
Nelson says that, despite Pan African’s strategy of looking for growth, none of those met management’s investment criteria and he has no intention of softening those guidelines.
There’s a good reason for that. Several years ago Pan African went boots and all into the Central African Republic, declaring it had located a rich new gold province there. But the drill results didn’t match the exploration hype and it subsequently walked away from the country.
– Ryan holds shares in Pan African Resources. The article first appeared in Finweek.
