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Pan African reduces 2023 gold production guidance; expects Mintails plant construction to begin next month

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(Kitco News) - South African gold mining company Pan African Resources (AIM: PAF) today announced its revised production guidance, as well as the imminent commencement of the Mintails project's construction.

The company said that its production guidance for the current financial year reduced to approximately 175,000oz (previously 195,000oz to 205,000oz), primarily as a result of challenges related to Eskom generated electricity supply, slower than anticipated ramp-up of continuous operations at Barberton Mines, and lower than expected production from Evander Mines' underground operations.

As a result of the reduced production guidance, the company's all-in sustaining costs (AISC) for the current financial year is now expected to be between US$1,325/oz and US$1,350/oz.

Pan African also noted that its production guidance for the financial year ending 30 June 2024 is 178,000oz to 190,000oz, with a further production increase in the 2025 financial year, following the Mintails project's commissioning during the first half of this financial year.

Importantly, the company said it has been informed by the South African Department of Mineral Resources and Energy of the imminent issuing of the Mintails project's integrated environmental authorization.

"Commencement of plant construction is therefore expected in the next month, and ground clearing activities have commenced, with steady state production from the commissioned project expected by December 2024," Pan African said in a statement.

"Despite lower than expected production, the Group is positioned to deliver a robust financial performance for the current financial year as a result of the excellent rand gold prices being received and also disciplined operational cost control," it added.

Pan African Resources is a mid-tier African-focused gold producer that owns and operates a portfolio of South African operations with a production capacity of more than 200,000oz of gold per annum.

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