“It’s business as usual”, says Cobus Loots. Cobus has been appointed as one of two interim chief executive officers at Pan African Resources, following the loss of the company’s long-standing former chief executive Jan Nelson, who resigned for personal reasons at the end of February. Cobus steps in to the gap in his capacity as the representative on Pan African’s board of Pan’s black empowerment partner, Shanduka Resources. But he knows Pan African pretty well in his own right. He’s been a director since 2009, and was formerly chief financial officer before he made the jump to Shanduka. The other new joint chief executive, Ron Holding, was previously Pan African’s chief operating officer, and has been with the company since 2001. For his part, Ron brings massive experience of the mining industry with him, and that has provided provide reassurance to any investors who had previously thought of Pan African as Jan’s baby, and might otherwise have wondered where it could go without him. There was indeed some disquiet on the day of Jan’s announcement, given its suddenness, and the shares dropped a sharp 2.25p from 17.5p to 15.25p. That amounted to a 15 per cent drop, which is fairly steep for a company that’s now installing itself in the ranks of the mid-tier gold producers. But among the more active market participants there was also an immediate feeling that that fall was an over-reaction, and the shares subsequently bounced back to 17.25p, before subsequently drifting off again as the effects of the wider malaise in the gold sector took precedence over everything else. The message from the market is that Pan African will survive Jan’s departure – or, to put it another way, Jan leaves the company that he all but single-handedly created in great shape to get along just fine without him. “Jan’s going to be missed on a number of fronts”, says Cobus, “but there’s a very strong team that remains and that will take things forward.” The market seems to agree. Even allowing for the effects of Jan’s peremptory departure, Pan African’s shares are still trading above the levels they were at 12 months ago – and there aren’t many gold companies on the market you can say that about in this time of falling gold prices and prevailing negativity. A look even further back will show that the shares have virtually tripled over the past three years. That share price performance has helped Jan win a lot of friend over the years, but it’s not the only reason he’ll be missed. He was a past master at the art of understating and over-delivering, and in his years at the helm of Pan African transformed the company from a bombed-out Aim shell into a successful producer that ought to deliver 250,000 ounces of gold this year, following the recently concluded acquisition of the Evander gold mine from Harmony. The creativity of his deals was something to behold. But the Evander acquisition was his last as chief of Pan African as it transpired, and the beginning of a new chapter in the Pan African story. It’s a big mouthful, but Cobus and Ron are sure that Pan African is more than capable of digesting it. For one thing, Ron originally started off at Evander, so he knows the project well. “I understand the asset and I understand mining”, he says. And he’s got a clear understanding of how he wants to take it forward inside the Pan African fold. “At Evander, Harmony managed it on a centralised basis, in terms of procurement, payroll and HR. Our approach is completely different. We believe that the asset must be able to manage itself.” Having said that, there will be no sudden changes. The deal only closed on 14th March, and the company has allowed itself plenty of time to assimilate its new flagship. “Harmony will continue to supply shared services to Evander for 12 months”, says Ron. “And that can be extended for a further six months if required. We’re not going to do anything too hasty. But the whole management team at Evander came along with the deal. The targets are still the same. There’s no strategic change at all. It’s back to production now.” Having said that, Pan African does have some plans to maximise the potential at Evander with the opening up of some old gold shoots, and the possible instigation of a tailings retreatment project that would dwarf the company’s existing tailings operation at its other major mine, Barberton. There is, says Ron, 203 million tonnes of tailings at Evander, compared to the 20 million tonnes at Barberton. The grade is around 2.9 grams per tonne, which is perfectly manageable given that no mining will be required. Further out, there are some far, far bigger long-term projects that also come into the company with Evander, but these will be developed in due course, almost certainly with a partner from either Russia, America or Asia. In the meantime, following a major rights issue that formed part of the funding package for the Evander acquisition, will there be any further capital raisings? Not likely, say Ron and Loots. They are on the hunt for a full-time chief executive, and there’s no saying what he will decide to do once appointed. But it’s pretty clear now that for the time being, integration is the order of the day. “Evander is cash flow positive, including the integration costs”, says Cobus. “The deal’s done. On any type of metric it looks to have been a really good deal for Pan African. Our biggest responsibility now is to ensure that the deal works – to get the gold out of the ground at a fair cost.” View this article on mineset