Pan African Resources has struck a five-year wage deal with the National Union of Mineworkers (NUM) for its Barbeton mines operation, covering the period June 2024 to June 2029.
JSE-listed Pan African is a mid-tier, African-focused gold producer also with a primary listing on the AIM of the London Stock Exchange.
Under the latest agreement announced yesterday, Pan African and NUM agreed to an average annual increase of approximately 5.3% per annum over the specified five-year period.
“We are pleased to have entered into multi-year wage agreements at Barberton Mines, which will ensure stability in labour relations at this operation over the coming years,” said Cobus Loots, Pan African Resources CEO said.
The gold miner also has a standing five-year wage agreement that lapses in June 2026 with labour union Uasa, which also represents another section of workers at the Barberton Mines.
This agreement with Uasa “provides for an increase of 5% or CPI, whichever is higher” capped at 6%.
It also provides the company and its workers “a once-off option to re-negotiate these increases, in the event of CPI being lower than 4% or higher” than 7.5%.
Moreover, Pan African Resources said maturation of Barberton Mines employee share ownership program (Esop) was bringing benefits for qualifying employees over its life.
The Esop for Barberton matures at the end of this month on completion of its 10-year term, although an early settlement of the scheme had been negotiated with employees and union for the end of March this year.
The qualifying employees had received dividends amounting to over R40 million during the scheme's tenor, with the final maturity benefits paid to employees last month.
More than 2 200 employees had qualified to receive final maturity payments, with payments dependent on the number of completed years of service.
“The maturation of Barberton’s Esop has also realised tangible benefits to all its participants,” explained Loots.
Last month, Pan African said it was well on course for a stronger financial performance this year after the company raised its output guidance and projected a lowering of production costs, amid strengthening prices of the precious and safe haven metal.
Pan African raised its production guidance for the year ending 30 June 2024 to the upper end of its earlier projected 180 000 ounces to 190 000 ounces.
The guidance has now been lifted to between 186 000 ounces and 190 000 ounces.
The company has concurrently ceased “processing of marginal surface sources” at the Evander Gold Mines which had become “uneconomical”.
The mine contributed approximately 2 500 ounces of gold in the first half of the company’s current financial year, and would have seen the company surpass its 190 000 ounces guidance if it had been maintained in operation.
Pan African has projected that gold production for its 2025 financial year will bump up to between 215 000 ounces and 225 000 ounces, with the company planning to commission its Mogale Tailings Retreatment (MTR) project later this year.
In March, Pan African completed an internal pre-feasibility study for the Soweto cluster, with the most feasible outcome being possible development of re-mining, overland piping and pumping infrastructure to process the material at the MTR plant.
BUSINESS REPORT