Substantial financial investment in the purchase, development and maintenance of infrastructure, plant and equipment has provided the capacity to generate sustainable long-term returns. We are aware of our responsibility to maintain, refurbish and replace our manufactured capital to ensure the safety of our employees and deliver optimum results.
Why manufactured capital is material to Pan African Resources
Infrastructure and equipment are essential to extracting resources, processing ore and transporting the concentrate. We maintain these assets carefully to extend the life of our operations and improve our commercial sustainability.
At both group and operational levels, management regularly inspects all tangible assets for evidence of deterioration. We regularly undertake improvement and upgrade initiatives to drive capital productivity and cost efficiency. Our manufactured capital comprises:
◗ Underground mining operations
◗ Surface mining operations
◗ Buildings, plants and milling stations
◗ Vehicles and equipment
◗ Infrastructure, pipelines and storage facilities.
Ageing infrastructure at our underground operations requires consistent maintenance and refurbishment, which forms part of operational planning and scheduling. Pan African Resources has prioritised addressing its most pressing operational challenges, which are:
◗ Providing safe environmental working conditions
◗ Maintaining mining flexibility
◗ Improving face time, thus enhancing productivity.
All engineering and equipment standards comply with original equipment manufacturer guidelines and the Health and Safety Act, as well as our own standard operating procedures and codes of practice. Equipment reaching its expiration date is generally replaced with similar or improved technology equipment in keeping with our internal equipment standards and requirements.
Elikhulu was successfully commissioned during September 2018, with ETRP’s throughput incorporated into Elikhulu’s processing capacity in December. The Evander Mines’ 8 Shaft pillar will replace the current remnant underground mining and vamping production and will contribute approximately 20,000oz in the 2020 financial year.
Barberton Mines benefited from increased underground mining flexibility and higher ore grades with the 272 and 358 platforms in production in early 2019. Fairview Mine has seen an increase in free gold being mined, thus we have invested in a gravity circuit to improve free gold recovery from this plant. The R18.0 million (US$1.3 million) investment has a repayment period of approximately two years, emphasising the added value this manufactured capital will provide to Barberton Mines.
Group growth strategies are supported by robust life-of-mine plans. Exploration drilling and activities to access and develop our orebodies were pursued during the year. To enhance our conversion strategy of Mineral Resources to Mineral Reserves, we prioritise organic growth projects within the mining value chain. Those projects that are most feasible and will enhance production are placed at the forefront.
To remain competitive, deliver on our production guidance and position Pan African Resources for the long term, we continually seek specific opportunities to enhance the performance of our manufactured capital and improve the overall efficiency and costs to optimise our operating model. A dynamic exploration drilling programme is underway at Barberton Mines to increase minable areas by utilising our existing infrastructure to access these additional underground resources. At Elikhulu, our focus is on further optimising operations. We are also embarking on optimisation exercises aimed at improving production and reducing water consumption. The board of directors approved the development of Evander Mines’ 8 Shaft pillar project, with first gold produced in August 2019.