Agile Practices in Gold Mining: Pan African’s Innovative Edge

Gold is one of the most valuable precious metals that have fascinated the human race for centuries. Its ability to serve various purposes, mainly as a store of value from coinage to jewelry to finding application in medicine, dentistry, and even electronics, has made it one of the most sought-after commodities. Amid its extensive applications and strong demand, its extraction from the earth’s crust has always come with its fair share of challenges.

Increasing production costs and stricter environmental constraints are some of the challenges that have gripped the gold mining industry. In addition, miners have had to contend with problems with permitting from governments and political instability in some jurisdictions that have disrupted operations.

Amid declining gold reserves, environmental concerns and regulatory concerns, miners are often forced to adapt to changing market dynamics. Where possible, using machines capable of excavating with more accuracy and less harm to the environment has had to come into play. Likewise, agility and innovation are increasingly taking center stage as gold miners adopt new technologies, such as data analytics automation, to streamline and enhance operations.

Pan African Resources is one of the companies that have reiterated its commitment to innovative practices that ensure sustainable gold mining production. The company leverages advanced technologies, the latest geological exploration software, and data modeling to profitably mine its high-grade underground and low-grade surface tailing gold deposits. While using innovative practices, the company seeks to position itself as a sustainable, safe, high-margin, and long-life gold producer.

A surge in gold prices in recent years has made gold mining lucrative on the risk-reward. While companies are always looking for ways to optimize operations to maximize returns, investors are always left to contend with uncertainties in the mining industry. Geopolitical uncertainties have always been the biggest challenge for investors eyeing exposure in the industry, as most gold deposits are located in developing nations with poorly developed access to the mineral deposits.

Political instability in African countries has proved to be a hard nut to crack, going by the number of coups that bring insecurity, triggering instability and, in most cases, disrupting mining operations. Even though miners are always looking for ways to navigate geopolitical uncertainties proactively, investors are always left to find a way of balancing and circumventing the risk at hand with the potential lucrative rewards.

In an era where investors are highly cautious about the impact of mining operations on the environmental, social and governance (ESG) structures of societies, illegal mining is also proving to be a big concern.

ESG-focused investors preclude mining activities that negatively impact the environment, peace, stability, development, and governance. Such activities often result in serious human rights violations and abuses and are linked to economic crimes such as tax evasion, fraud and corruption.

The risks associated with illegal mining sometimes supersede the returns investors will likely generate. Therefore, most investors would often shun such operations as one of the ways of guaranteeing and safeguarding their capital.

Investors’ concerns go beyond geopolitical uncertainties. While carrying out due diligence, investors often query the impact of mining operations on the environment and society’s social and governance fabric.

A sound investment opportunity for most investors would not result in severe negative environmental impact through deforestation, land degradation and air and water pollution. Therefore, most would settle on companies focused on sustainable mining operations while adhering to published ESG commitments. Pan African Resource is proving to be one of the companies that commits to fair, ethical, and sustainable principles in all its mining operations.

As a mid-tier African-focused gold producer, Pan African Resources has invested heavily in innovation and new efficient technologies to generate compelling and sustainable returns. Digital technology has significantly impacted the company’s operations by improving and enhancing safety and productivity, mineral exploration and environmental impact.

Drones are one of the cutting-edge technologies the company is increasingly using to enhance and plan its mining operations. The drones effectively and efficiently assess and access the more dangerous mines and quarries. In addition, they double up as security devices for providing a bird’s eye view of all stockpiles in a mine. The drones are also used to monitor volumes mined at Pan African’s tailings deposits as well as to assess the safety and stability of these surface deposits.

Using the latest geological exploration software and data modeling has enhanced the location of lateral extensions of underground ore bodies at Barberton Mines. The gold producer has also invested in clean energy through solar renewable energy plants as part of its commitment to environmental sustainability. The solar energy plants help reduce production costs and improve the company’s carbon footprint.

Pan African Resources operates under a holistic environmental strategy that strives to ensure sustainable gold production and socioeconomic development in the areas in which it operates. Consequently, the company invested $8.1 million in a 10MW solar photovoltaic plant at its Evander operation that provides up to 30% of the power requirements at its Elikhulu Tailings Treatment plant. It was the first gold miner in SA to commission a large-scale solar renewable energy plant.

The solar power investment is expected to result in CO2 savings of over 26,000 tons per year from the company’s gold mining operations, helping it reduce its carbon emissions. Additionally, renewable energy investment will reduce dependency on the national grid and exposure to above-inflation annual power cost increases. The company is already working on extending its PV plant by a further 12MW to supply the expansions to the adjacent underground gold mine.

Pan African Resources has consistently delivered on its commitment to building solid relationships with community members and leaders in all its jurisdictions. It is increasingly playing a significant developmental role in communities around Barberton and Evander in Mpumalanga Province, South Africa where its operations are located, and also in Gauteng where it is constructing the Mogale Tailings Retreatment operations.

The company has launched and overseen strategic initiatives and programs to help local communities become self-sustainable. Project Blue is one project that has transformed 15 ha of surplus land owned by the mine into a modern blueberry farm that provides sustainable employment opportunities to mainly women from local communities in Barberton.

The company is also playing a role in improving access to quality health services where it recently constructed and equipped a new clinic while also providing CSI support for HIV/AIDS patients and orphans. The mid-tier sustainable gold mining company also builds critical infrastructure for host communities through education and water recycling projects. It has also inked long-term wage agreements with its organized labor force and has cemented an excellent social license to operate with its host communities.

Pan African Resources relies on innovative mining techniques as part of its sustainable mining strategy aimed at increasing the life of its mines. The company uses modern exploration techniques and planning systems to improve its resource base, including its long-life and high-grade underground mining operations where mining has been continuously undertaken for over 100 years. In addition, it boasts of long-life operations with current reserves of over 20 years and a mixture of low-grade, high-margin surface operations and high-grade, long-life underground mines.

The company has the flexibility to balance its resource base with mine output through innovative mine management and production practices. Smart management focuses on sustainable production levels that ensure no strain on infrastructure and ore flow, therefore ensuring mine life.

The company also achieves sustainable production through cost-effective resource expansion, resulting in a longer mine life and extended profitability. Consequently, it builds inventory at its mines to balance with the resource depletion rate. Production only increases when the mineable resource is large enough to sustainably support the operation.

Like many other mining companies, Pan African Resources has to deal with increasing levels of illegal mining activities, especially at its Barberton mines. While the illegal activities pose significant safety and security risks, the company uses innovative methods to curtail this scourge.

It has implemented a multi-layered strategic and operational approach to combat the activities. Part of the plan entails collaborating with relevant law enforcement authorities while expanding efforts to include community-based prevention initiatives through effective communication. The company has also introduced CCTV networks and dedicated significant resources to sealing off old mine shafts to prevent unauthorised access. The investments and initiatives enable the company to target high-risk areas more effectively.

Pan African Resources is committed to achieving industry-leading health and safety performances in its aim to become a sustainable, high-margin, and long-life gold producer. It has maintained industry-leading safety statistics in the South African gold mining industry by consistently carrying out initiatives and interventions aimed at developing safety leaders at all levels in the group

The low annual injury frequency rates and multi-million fatality-free shift milestones further affirm its efforts to ensure the working environment is free of injury and harm. To achieve its zero-harm goal in the working environment, the company continues to implement safety awareness campaigns and educational initiatives to improve safety rates.

Pan African Resources has remained competitive in the challenging gold mining business by being agile and adaptable to changing market dynamics. Over the years, the company has responded proactively and timelessly to issues like electricity constraints and increasing costs in South Africa. The company’s entrepreneurial and performance-driven culture has allowed it to diversify its underground gold mining portfolio to pursue organic growth and production enhancement projects.

Adapting agile mining practices has allowed the company to implement lean principles to monitor operations and performance, leading to significant cost savings and improved efficiency. Likewise, it has lowered all sustaining costs to $1,149/oz at its low-cost operations which make up 85% of the group’s annual production, making it one of the most efficient gold miners globally.

Pan African Resources is committed to building trust and credibility by being transparent when reporting on all its operations. Transparency is the driving force as the gold miner focuses on providing investors with access to accurate and timely information about its mining operations, ESG initiatives, financial governance and strategic direction.

Transparency in reporting has allowed the company to mitigate risks and create value for investors. By being open and timely on its regulatory filings and obligations, the company has minimized uncertainties and provided investors with the necessary information for assessing risks accurately.

Maintaining high gold production levels has allowed Pan-African Resources to achieve improved operating margins. A capital-efficient and optimally run portfolio has enabled the company to generate significant free cash flow and provide excellent returns to shareholders, backed by one of the highest dividend yields and returns on equity in the industry.

Pan African Resources aims to be the lowest all-in-sustaining gold producer in Southern Africa. Part of the strategy requires focusing on sustainable gold production in a socially responsible manner with minimal environmental harm while improving production and reducing unit costs. Likewise, the company is focused on growing its business organically within the portfolio. The company also boldly invests in innovation and new efficient technologies to generate compelling and long-term shareholder returns.

The company would also like to create sustainable host communities that do not rely solely on mining for employment and are developing local skills, businesses, and agriculture projects that will generate income and create additional job opportunities.

While transparency is crucial to strengthening investor relations, Pan African Resources is expanding its base by targeting new investor markets. The company has set its sights on the US market, having launched a Level 1  American Depository Receipt programme backed by the Bank of New York in the OTCQX exchange.

The mining industry globally is under immense pressure to integrate innovation in the race to generate optimum returns. New regulations, complex geological environments, geopolitics uncertainties, and spiraling shareholders’ expectations have left companies with no option but to adapt ways of improving productivity while keeping costs under control to manage returns from volatile metals prices.

Likewise, Pan African Resources has set out to be a leading sustainable gold producer through innovation and agile practices. In response to changing market dynamics, the company has succeeded in adopting an array of digital solutions, and remote monitoring, to stay efficient and competitive in the industry.

The adoption of agile practices has positioned the company to generate optimum returns from its long-life operations with reserves of over 20 years and, in the process, generate optimum shareholder returns.