(NewsDirect)
Pan African Resources PLC (AIM:PAF, OTCQX:PAFRY, JSE:PAN, OTCQX:PAFRF) CEO Cobus Loots tells Proactive's Stephen Gunnion the company is experiencing a positive impact from the current high gold price, which recently crossed $2,400 an ounce.
Loots pointed out the robust gold price has been supported by significant purchases from central banks and changes in US interest rates. Pan African Resources, a South African company, benefits further due to its costs being in Rand, enhancing profits when converted from the strong dollar-based gold prices.
Loots refrained from predicting future gold prices but acknowledged the beneficial effect of the current high prices, which could attract new investors and potentially lead to a revaluation of companies in the sector.
Despite the high gold prices, he noted that Pan African's projects are profitable even at lower prices. He specifically mentioned the Mentails tailings retreatment project, which is under construction with capital costs largely fixed, expected to reach completion by the end of the year. The current gold prices could allow for the project's capital to be recouped in under three years. Other projects like Barberton and Evander are also performing well due to the favourable gold price environment.
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