Scale benefits boost Pan African

The problem is that grades at Evander were in decline throughout 2013. This contributed to an 8 per cent increase in cash costs at the complex, and given that Pan African is still processing lower-grade material at Evander, we expect these costs pressures to persist for most of 2014. Nonetheless, and despite lower gold prices, Pan African was able to increase comparable net profits by two-thirds to £17.3m.

The contribution from Evander, coupled with initial production from the newly commissioned Barberton tailings retreatment plant, meant that half-year gold sales more than doubled to 100,172 ounces. Even with reduced grades at Evander, the scale benefits of the expansion helped to reduce overall cash costs by 3 per cent to $834 (£499) an ounce. In common with other gold miners, Pan African had to contend with falling prices. The group received an average of $1,311 an ounce, a fall of 22 per cent on the previous interim price - although the relative decline was just 8 per cent in rand terms.