Pan African Resources Plc, a South African gold miner, has outperformed its peers this year by focusing on extracting gold from tailings, waste dumps left behind by previous mining operations. This strategy, combined with the rising global gold price, has led to a 94% increase in its share price.
The best-performing South African miner this year is defying the country’s contemporary reputation for ever-more costly and lower-grade gold production. Pan African Resources Plc extracts the precious metal from waste dumps, known as tailings, left behind by decades of mining when South Africa was the world’s biggest gold producer. It’s also operating century-old underground shafts around Barberton, the site of the country’s first gold rush in the 1880s.
The stock has gained 94% in Johannesburg this year, more than triple the return of the next-best miner, Harmony Gold Mining Co. Ltd. It’s up by a similar amount in London, where it is listed on the Alternative Investment Market. The shares rose 0.3% in Johannesburg on Tuesday, hovering near the record high set earlier this month. A gold price that’s been smashing through record after record – surging 27% since the start of the year and hitting an all-time high of $2,790.10 an ounce on Oct. 31 – has helped. Larger players haven’t scaled the same heights, partly because rising operational costs and weaker output across extensive global assets have offset the windfall of higher prices. Pan African, which produced a relatively modest 186,000 ounces of the metal in 2023, has bolstered its portfolio of traditional deep mines with less expensive surface operations that process old tailings sites and will account for almost half of output in a few years. “We can do what the major guys will find difficult to do, which is grow production – and low cost production – quite materially,” Pan African chief executive officer Cobus Loots said in an interview. The company’s third tailings project, Mintails, which is being ramped up, will provide an extra 50,000 to 60,000 ounces annually, he said. “I think the market’s quite excited about that.” The miner’s “increasing production profile and decreasing cost profile” make it attractive relative to peers and insulate it from a lower gold price, according to Allan Gray Lt
GOLD MINING SOUTH AFRICA TAILINGS PAN AFRICAN RESOURCES STOCK PERFORMANCE
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