South African gold miner Pan African Resources could maintain its strong rate of profit growth and dividend payout in the current financial year if gold prices remain at current levels, its chief executive Cobus Loots said on Wednesday.
Pan African, which produced around 180,000 ounces of gold metal last year to beat its own guidance, posted a 92.4% increase in its headline earnings per share (HEPS) – South Africa’s main profit measure – to 2.29 U.S. cents for the year ended June 2020, it said in a statement.
“The earnings growth had been on the back of much lower gold prices that were there most part of last year. If gold prices are resilient, then that bodes well,” Loots told Reuters in an interview.
He did not want to comment on specific numbers but said the momentum could be continued.
Pan African will pay a final dividend for the year at 312.9 million rand ($19.21 million), more than six times what it paid out last year.
Record gold prices, which surpassed the milestone of $2000 per ounce early August, have given a lifeline to South African gold miners, and have been helped by a weak currency.
Gold prices rose by up to 28% in the last fiscal year while the rand depreciated against the dollar by around 18%. This made the local currency production cost of the metal cheaper, while while the selling price, in dollars, was higher.
The company aims to be net debt free by June 2021, the 41-year old chief executive of the mining company said.
(By Promit Mukherjee; Editing by Elaine Hardcastle)