Good morning to all of you. A very warm welcome to the Pan African Resources interim results presentation. Thank you very much for taking time out of your schedule to join us this morning. At the outset, I have to say, in terms of our underground safety and also the production from our Barberton underground operations, the last half year has been a challenging one for Pan African. It is, however, important to contextualize these two issues. We are comparing ourselves to what was a year of record production and profits in 2022. We are implementing concrete measures to improve safety and production from the Barberton underground. These initiatives should see a much improved performance in the second half of the financial year. Pan African is also now benefiting from a rand gold price in excess of ZAR 1 million per kilo, which is very attractive.
Our strategy is to position ourselves as a safe and sustainable high margin and long life gold producer. I believe that the next slides demonstrate very tangible progress in terms of delivering into this strategy. We will keep the presentation fairly brief, with an opportunity for questions afterwards. Joining me in presenting today will be Deon Louw, our financial director. You are welcome to refer to our SENS and RNS announcements and to the supplementary information available on the Pan African website should you require detail not dealt with in today's presentation. Please note the disclaimers and detail on forward-looking statements on slides two and three. On slide number four, an overview of the presentation.
We will start with some key features from the half year past, our health and safety performance and operating environment, including how we are dealing with South African specific issues, in particular, the current electricity constraints. The presentation contains further detail on our unique portfolio of surface re-mining and underground assets, the performance of these different operations, and also specifically how we are turning the corner at the Barberton underground. As part of this section, we will discuss the group's all-in sustaining cost, performance and outlook, and how we continue to reinvest in our mining assets via capital spend to ensure their sustainability into the future and to also grow future gold production. I look forward to spending a couple of minutes discussing progress on our ESG initiatives, where our aim continues to be to go beyond compliance. Deon will analyze our interim financials.
Despite lower production in the half, we still generated significant operating cash flows. We will conclude the presentation with an update on our growth and exploration projects and by demonstrating that Pan African is firmly focused on continuing to create value for all of our stakeholders. Slides number 6 and 7, some key features for the half year. Pan African is generally known for delivering into our group production guidance. Admittedly, in the last 6 months, we were light on production. We would have liked to finish at 95,000 ounces or above for the half, with 105,000 ounces or so in the second half. Other than the Barberton underground, the remainder of our portfolio performed in line with expectations. The operational restructuring we are implementing at Barberton should yield significant improvement in the next 6 months and also in the years ahead.
In terms of costs, all-in sustaining unit costs came in a bit higher than what we'd hoped, also as a result of lower production for the half. The weakening rand dollar exchange rate to some extent softened the blow. We continue to see inflationary pressures experienced by all global miners. Noteworthy is that more than 85% of our group gold production was delivered at an all-in sustaining cost of below $1,150 per ounce. Surface business really performed very well here. The addition of an operating Mintails to our portfolio in the next 18 months should further assist the group in terms of re-reducing unit costs of production.
We are now guiding a group all-in sustaining cost of approximately $1,250 per ounce for the full year at an average exchange rate of ZAR 17 to the dollar. Slide number 7. Profit was lower as a result of lower gold production, again, comparing to a record year in 2022. We still returned attractive dividends to shareholders and successfully launched the first ZAR-denominated sustainability bond in the mining sector, with our initial issuance being oversubscribed. The success of this bond demonstrates the market confidence in our ability to execute into our growth projects and specifically into the Mintails opportunity. ESG, very proud of our achievements on this front, particularly on renewable energy and water recycling. Slide number 9, our safety performance and journey to zero harm. The reporting period saw a very good performance from our surface assets.
Unfortunately, our underground operations regressed from what was an industry-leading safety performance in the last year. We have now refocused our safety initiatives to ensure that we perform a whole lot better in the period ahead. We have also commissioned independent audits to identify other areas for improvement. Proceed to an overview of our operating environment and operations starting on slide 11. Few mining jurisdictions are without challenges, certainly South Africa is no exception. It is therefore key that you have quality assets and a responsive management team, experienced and equipped to deal with problems and issues. We continuously seek ways of making our business less susceptible to adverse external impacts in South Africa. Some matters to highlight in terms of our operating environment over the last year include the following. We continue to reduce our reliance on Eskom, the South African electricity utility.
The group is planning to have at least 30 MW of our own generating capacity in the next 24 months. In terms of the regulatory environment, I would expect further concessions from government fairly soon, which should make it even easier to produce one's own power or procure electricity from independent third parties. Pan African's assets have long lives with extended mining rights. The Evander Complex's rights are valid until 2038, and those at Barberton until 2051. In terms of Mintails, we expect to obtain all of the required permitting to commence production in the next 6 months. From a security perspective, our efforts to safeguard our people and operations and minimize the impact of illegal mining and criminality are ongoing. We continue to roll out a number of new technology-based solutions to increase the effectiveness of measures and reduce our security costs.
We have developed stronger partnerships with local law enforcement. In the last year, we have definitely seen an improvement in terms of illegal mining situation at Barberton, which is encouraging. Tailings management continues to be a critical focus for mining companies. Our large tailings facilities have all been independently audited, and we are working towards complying with new international standards. Finally, in terms of stakeholder interaction, we invest heavily in our social license to operate. Pan African's mines make a meaningful positive impact in the areas where we operate. To conclude on this slide, Pan African's track record demonstrates that we can operate and grow in South Africa and do so very successfully. On slide number 12, some information on our energy strategy. Pan African will continue to lead the way in terms of becoming more independent of Eskom.
We have convincingly demonstrated the operational and financial viability of renewable energy and will continue to expand this footprint in the years ahead. We have also invested in additional diesel-generating capacity to cater for longer periods without Eskom power at our underground operations. Slide 14, overview of our operations. Our portfolio is comprised of a unique mix of surface and underground assets. The addition of Mintails means that we now will have three large mining complexes in South Africa. Surface operations reduce unit costs and turn legacy liabilities into profits, whilst the underground provides long life of mines, solid returns as a result of the very large sunk capital base, and also attractive optionality, which we are bringing to account as demonstrated by our progress at the Evander underground.
Moving on to the next section of the presentation, where we spend a couple of minutes on the operational performance of each of our core assets. On slide number 16, Elikhulu. Production for the six months was steady despite some challenging weather conditions. The Leslie Bracken pump station is now fully commissioned, setting us up for the next five years of re-mining. Elikhulu remains a flagship asset for our group. Long life with really attractive margins. It is testament that large mining projects can be successfully constructed in South Africa, and we will carry all of the learnings on building and operating Elikhulu over to Mintails when we commence construction. Slide 17, the current half year again saw an excellent performance from the BTRP, with the asset generating $7 million in EBITDA.
We can maintain this level of production from the BTRP for approximately 18 more months. As we've said before, the future of the BTRP is processing ore from Royal Sheba. We will spend a bit more time on the Royal Sheba project when we discuss future growth. Mintails on slide number 18. We have made some excellent progress on this project, and we would hope to start full-scale construction by June of this year, subject of course to finalizing funding and then also permitting. Mintails ticks a number of boxes for Pan African and our investors. It will materially expand, effectively double our surface mining business, providing us proper scale in what is a very attractive space. From an ESG perspective, it will rehabilitate an area in dire need of remedy, both socially and environmentally. The project has a relatively low execution risk.
It will be Pan African's 4th large-scale gold tailings retreatment venture. We have again put together our Elikhulu project team to also execute into Mintails. The economics of Mintails are very attractive, with a quick repayment of upfront capital, a long life of more than 20 years, including the Soweto cluster, and producing gold at an all-in sustaining cost of sub $1,000 per ounce. Dion will discuss the status of Mintails' funding in his section of the presentation. However, slide 19 demonstrates that our project execution timeline is very much on track. On slide 20, Pan African is building a world-class tailings retreatment business extending for many years into the future, safe, predictable and high margin, effectively a gold annuity.
Slide 21, the Evander underground team delivered in line with expectations despite electricity constraints, producing almost 20,000 ounces for the half year at an all-in sustaining cost of $1,050 per ounce. We are building a new underground mine at Evander, and some highlights from the half include the successful commissioning of phase 1 of our new underground refrigeration plant, commencement of stoping of the F line on 24 level, commencement of development for our subvertical hoisting shaft, and also the dewatering of the Igoli decline, which will be complete before the end of this financial year. We are spending significant capital on Evander underground in the next two years, but thereafter it will be a long life asset contributing materially to our future production profile. Slide 22-24 provide more information on the Barberton underground operations.
On slide number 24, we have done a lot of good work at Barberton over the last years, increasing development to create more operational flexibility and optimizing logistics. The operation has a long life with attractive grades. Above-inflationary cost increases, combined with a deeper mine and constrained infrastructure, have made the operations more difficult and expensive. It is time for a reset. At our previous presentation, we committed to a restructuring of the Barberton underground. We are now delivering on this turnaround strategy, having completed engagements and finally signed agreements with our representative labor unions. Importantly, our strategy means no large-scale retrenchments, a win-win for everyone. What does this restructuring look like? In essence, Consort is being converted to a contractor operation focused on reducing overheads and mining higher grade areas.
Going forward, our break-even gold production at Consort will be less than 30 kilograms of gold per month. We will continue exploration and development of new mining areas at Consort. The contractor should be fully ramped up by April of this year. Excess Consort staff have been moved to Fairview and Sheba in order to supplement our existing staff complement for continuous operations. Shifts have been extended from 8 hours to 10 hours, still allowing plan time for maintenance. We are expecting transitioning to 2 blasts per day in higher grading and development areas in the next months. The ability to mine more tons and do more development will also impact our cut-off grade, meaning that lower grade ore bodies also now become available for mining.
Additionally, the move to renewable power in the next year, together with infrastructure improvements such as the subvertical shaft, should further contribute to unit cost savings in the years ahead. We look forward to reporting a much improved performance from the Barberton underground in the next 6 months. Slide 26, the section dealing with all-in sustaining costs. More than 85% of our portfolio produced at an all-in sustaining cost of below $1,150 per ounce. We expect the unit costs at Fairview, Sheba and Consort to reduce in the second half of the financial year, benefiting from the turnaround plans currently being implemented. Slide 27 demonstrates that our cost performance on core operations continue to be very much in line with the average for the global sector. Slide number 29, group capital projects.
We continue to invest into our assets. Our guidance in terms of capital investments for the year is unchanged. In the next financial year, Elikhulu's capital will come right down. The bulk of our capital continues to be spent at Evander underground, where, as we have said, we're effectively building a new mine on 25 and 26 levels. On slide 30, environmental, social and governance and our beyond compliance approach. The increased focus on ESG in recent years has required our group to explore opportunities of improving our operations and ensuring that we future-proof our business. As detailed earlier in this presentation, we continue to expand our renewable footprint. We are also commissioning a large water retreatment plant at Evander before the end of this month, pretty much eliminating the use of potable water.
We collaborate to ensure the sustainability of the unique ecosystems at Barberton, and we also create employment and economic opportunity through unique ventures such as the large-scale blueberry operation at Barberton. Pan African is also now rolling out independent assurance on our ESG activities and reporting.
I will now hand over to Deon, who will provide an overview of the financial results for the interim period.
Thank you, Cobus. Slide 33 summarizes the group's interim results for the 2023 financial year. As is evident, revenue in US dollar terms declined by 19%, a combination of the lower production and a decline in the US dollar gold price by 5%. In rand terms, the revenue decline was only 7%, as the rand depreciated by 15% relative to the dollar during the six-month period. The rand gold price increased by 10% to ZAR 956,000 per kilogram. Although the US dollar is our reporting currency, our functional currency is the rand, as our costs are largely rand-based and our debt is fully rand denominated. The inverse correlation between the dollar gold price and the rand-dollar exchange rate tends to support our revenue line despite a decline in the dollar gold price.
Unfortunately, as with all mines that have a large fixed cost structure, a decline in revenue has a disproportional adverse impact on margins. The 19% decline in revenue, or 7% in ZAR terms, when translated to US dollars, gave rise to a 25% decline in EBITDA to $57 million and a 37% decline in attributable earnings to $29 million. The increase in net debt by 90% to $54 million is expected as the group executes into its capital development programs, recognizing that the bulk of this expenditure is expansionary of nature to enhance existing production or bring new production online. Slide 34 summarizes the group's cash flows for the interim reporting period. After paying all operational costs, taxes, finance costs, and the net dividend of $20 million, surplus cash of.
Surplus cash of $11.6 million was generated by the operations. Of the $51 million spent on capital, approximately 80% or $41 million was invested in expansionary capital, as I referred to earlier. Sustaining capital being quite muted at approximately $10.5 million. With the exception of $3 million, the capital expenditure in this half year was funded from the group's term debt facilities, which explains the increase in net debt to $54 million. We closed the interim period with a cash holding of $34 million. At the date of this presentation, the group's immediate liquidity and undrawn bank facilities comprised ZAR 1.1 billion, or approximately $62 million. Slide 35 illustrates the group's debt structure, both existing and future debt facilities.
The first column represents our core debt facilities, comprising the existing revolving credit facility of ZAR 1 billion, or approximately $59 million, and general banking facility of ZAR 140 million, and are designated for bridging capital expenditure and working capital funding. The second column represents our project-specific debt, the maturities of which are matched to the cash flows from the projects they fund, similar to the original Elikhulu senior debt facility, and comprises ZAR 800 million, or $47 million, Domestic Medium Term Note facility, and the ZAR 1.3 billion or $76 million Mintails term facility. Both facilities being sustainability instruments and a demonstrable commitment to our ESG imperatives.
Total senior borrowing capacity now amounts to ZAR 3.3 billion, or approximately $194 million, which, assuming full utilization of the ZAR 1 billion RCF, and relative to the existing EBITDA only of approximately ZAR 2 billion or $180 million, results in a debt-to-equity ratio of approximately 1.7 times, well within the covenant compliance level of 2 times. Furthermore, to ensure that the debt-to-equity ratio remains robust during Mintails construction, the calculation of this ratio during the construction period will exclude the project-specific debt of $76 million in the denominator.
As Mintails construction commences, the project senior debt will increase commensurately to approximately ZAR 2.1 billion and is expected to fully amortize well within the four-year redemption term, especially at the prevailing rand gold prices of approximately ZAR 1,070,000 per kilogram relative to the ZAR 872,000 per kilogram assumed in the regional feasibility study. Slide 36 illustrates the redemption profiles of the group's future capital structure.
I specifically make reference to future capital structure as certain facilities are still being implemented, specifically the extended ZAR 1 billion RCF and the ZAR 1.3 billion Mintails senior debt facility, which, in conjunction with the Domestic Medium Term Note program of ZAR 800 million, constitutes the senior debt funding for the Mintails project. Rand Merchant Bank as leader arranger of the senior debt for the Mintails project have underwritten the ZAR 1.3 billion facility, and we expect to have it finalized by mid-April in anticipation of the inception of the Mintails construction in June. The green line shows a drawdown and redemption profile of this facility. Although the graph assumes the contractual 2-year drawdown period, practically, we expect an 18-month construction period, followed by a 4-year redemption term. A loan structure almost identical to the ZAR 1 billion funding originally raised for Elikhulu construction.
The golden line graph shows the ZAR 1 billion capacity of the extended RCF, culminating in a bullet repayment in 2026, assuming it's not repaid or extended again at that time, given its revolving nature. The extension of the existing RCF was required to avoid the refinance risk in mid-2024, at a time when the Mintails debt will probably be close to being fully drawn. The Domestic Medium Term Note issue comprises a 3-year tranche of ZAR 585 million or $35 million, and a 5-year tranche of ZAR 250 million or $12 million, and has enabled the group to diversify its funding base by accessing the deeper debt capital markets.
We are also well advanced in refinancing the existing Evander solar facility on more favorable terms as part of a larger solar funding facility, which will provide for the funding of Barberton solar facility. With these facilities in place, the group's principal debt redemptions will, for the next two years, only comprise the annual redemption of approximately ZAR 30 million or $1.7 million on the existing solar facility, enabling the completion of the capital expansion programs already embarked upon without adversely impacting discretionary cash flows and the group's ability to continue distributing dividends to shareholders. Thank you.
Thank you, Dion. In addition to our current operating assets and the Mintails project, Pan African also has other exciting near-term growth projects, specifically Royal Sheba at Barberton. Slide number 38. During the reporting period, we made good progress with the development of Royal Sheba. Just to recap, Royal Sheba is a world-class greenstone belt deposit with a strike length confirmed at 850 meters and mineralization occurring over widths averaging 10 meters. It will be mined using mechanized massive mining methods. Royal Sheba has always appeared a bit lost in the Barberton portfolio, given the higher grade of our other ore bodies. The measured and indicated mineral resources alone accounts for more than 800,000 ounces of gold, with significant upside on the open down-dip extent. Modeling only BTRP capacity, Royal Sheba demonstrates an 18-year life of mine, steady stated production, 25,000 ounces a year.
We also have additional processing capacity available at our Sheba and consort metallurgical facilities to increase this production number. We successfully completed our bulk sampling project on Royal Sheba, with the results exceeding our expectations. We are now completing a full project plan, which we will release to the market before the end of March of this year. On slide 40, information on our exploration venture in the Sudan. We've made some very good progress in the last six months. Our sample testing laboratory is now fully commissioned with some very encouraging results. Actually, excellent grades from our exploration program. We have also completed the construction of our first exploration camp on block 12 A within our concession area. If we wrap up on slide 41, Pan African is focused on delivery in the six months ahead. Key imperatives include the following.
We will continue our proactive journey to zero harm through a focus on health and safety initiatives. We will increase our production run rate and successfully implement the turnaround of the Barberton underground. We need to execute into the capital projects to sustain and increase future gold production. Our costs are well controlled. However, we will continue to mitigate inflationary pressures through optimization and other initiatives. We plan to commence full-scale construction of the Mintails project. We will continue our ESG focus through programs to support sustainable host communities, increase use of renewable energy and recycling initiatives. We will focus on maintaining our sustainable stakeholder and shareholder return-centered approach to capital allocation decisions, creating value for all. Thank you very much for your time this morning. As always, we look forward to mining for a future in the months ahead. We will now be available to address any questions.
Thank you again for joining us today. Let's see if there are any questions on the telephone lines.
At this stage, there are no questions from the lines.
Excellent. Should we move on to the questions we've received via email or via the platform?
Thank you, Cobus. We've got a few questions from Edward Smyth, a private shareholder. The first one, what is the company's expectation for reducing AISC at Barberton with Fulco, given the positive mix and shift from Consort, increased productivity face time and reduced overtime, and what operational targets are being set?
Thanks, Ed. Consort is a little bit different to Sheba and Fairview. Consort, the contract is on-site. They should be pretty much ramped up by April. The first aim at Consort is to make sure the operation pays its own way, which is about 28-30 kilograms of gold to be produced per month. As we've said, we'll continue to explore and open up new ore bodies. There's still quite attractive ground at Consort, certainly at the BC shaft pillar and other areas also. That's the focus on Consort, at Consort.
In terms of Fairview and Sheba, some of the studies that we've done indicate that we could increase face time by as much as 40% by these measures that we've put in place. Clearly, it takes a little bit of time to ramp up, but I think as a base case, we would hope to increase underground production by somewhere in the area of 15%-20%. I think that would be a very good achievement for Fairview and Sheba. Just make sure that we can consistently achieve that target.
Thank you, Cobus. The second question from Ed is: Does the company remain hopeful that Sudan may produce compelling results?
We are very hopeful, I have to say. You would have seen that the release detailed some attractive grades from our exploration block 12A, so 1 of 5 blocks that we have. Clearly, exploration takes a bit of time. It's not something that you can do in 6 months or so. You know, I think we need to give ourselves 12 or 18 months to firm up on what we have. Our geologists are very excited. It's not the easiest operating environment, but, you know, that was to be expected. Yes, we're very hopeful for what we'll find. I mean, there's definitely a lot of gold in Sudan. That's a fact. It's about proving up an economic deposit and then coming to terms with how one can mine it and extract value.
We're very excited about Sudan.
Thanks, Cobus. The next question from Ed regards funding. What alternatives exist to closing the $23 million funding gap on Mintails other than equity raise at less than 4 times 2024 PE?
That's, Ed, that's a good question, and it's something we've been working on for some time now. We've already funded a sizable portion of that deficit with the acquisition of the surface areas as well as infrastructure that's been already built on-site. There's still a deficit of a couple of hundred million ZAR, and we are looking at a number of ways to do so, which involves either a derivative product, a forward sale of gold, by way of example, gold loan, by way of example. It's slightly small for a royalty or a stream, but there are alternatives to the equity raise, and in due course, we'll be able to give more shed more light on that.
Yeah. I mean, Just to add to what Deon, what that Deon's saying, Mintails, as we've highlighted in this presentation, it really is an incredibly attractive opportunity. It's something we need to start building. We have a full team that's assembled that have started work. We're very excited about Mintails, we don't wanna rule out anything in terms of the funding of that deficit. We need to get going.
Thanks, Cobus. The last question from Ed. Does the lower range of the 195,000 to 205,000 ounce annual production target include the impact of load shedding? Might you talk through AISC guidance for the full year and what factors will affect it?
I think our initial guidance for the year was approximately a sort of similar level of production to what we did in 2022, which again, was a record year. The guidance that we've put out does assume the same level of electricity restrictions as what was prevalent in the first 6 months, not anything more. And then in terms of AISC, I think we're guiding to $1,250 at a ZAR 17 exchange rate. Generally, Pan African is very good at controlling our costs. If you look at our profile in terms of the actual absolute spend, we haven't overspent, and we won't overspend on costs. It's a product of ounces. Clearly, if we produce more ounces, then that unit cost will go down.
That really is the focus, is producing these additional ounces safely.
Thanks, Cobus. The next, it's more of a request really from Mark Bentley of ShareSoc. He says that, "If you raise equity capital, please permit retail investor participation, for example, using Peel Hunt's REX platform.
I think that comment is noted. Again, we wouldn't wanna take anything off the table right now.
Okay, thank you. Donna Slater from Mining Weekly asks if we could please provide more detail on the solar PV ambitions, i.e., what is the value of the 30-megawatt project? How does Pan African intend to roll out solar at its various sites? How much is currently being saved monthly in electricity payments as a result of currently installed solar PV plant? How much will be saved monthly once the 30-megawatt plant is online?
Mm-hmm.
What effect is solar energy plant having on Pan African's requirement to curtail power consumption from the grid during load shedding? Lastly, what does the return on investment into renewables look like, the payback period?
Yeah, that's quite a number of questions, but we'll try and address them. Yes. We have 10 megawatts of operating at Evander. As we've said many times in the past, we were the first mining company to commission a plant of that scale. Our next project is 8.5 megawatts at Barberton, we'll break ground before the end of June and have it steady state and producing early in the new calendar year at the latest. The capital cost for that project is somewhere between ZAR 180 million-ZAR 200 million. And there are facilities that we are working on to fund that expansion. The next phase. That's phase two.
Phase three would be an expansion of what we're doing at Evander to subsidize the underground, that will be anywhere from 12-15 megawatts. You can assume the same sort of level of costs. Returns are attractive. Payback, assuming an aggressive rate of electricity price escalations as has been the case in the past, anywhere between 4-5 years on these plants. We're saving in the order of anywhere from 2.5 to 4 million ZAR per month on the first 10 megawatts. It's very attractive from that perspective. Yes. Then we're looking at a number of other alternatives. There's no one silver bullet to the issue that we are facing in terms of Eskom.
That's why we are not putting all of our eggs in one basket. I think hopefully we'd be able to make some additional announcements also soon in terms of further expanding that renewable footprint.
Thank you, Kobus. The last question we have online is from Arnold van Graan at Nedbank. What is the once-off costs of the restructuring at Barberton?
There won't be. That's the good thing about this, Arnold van Graan, is that there's no major retrenchment, so we're taking excess people from Consort, and it's about 300 staff members we're moving to Fairview Sheba just to supplement the existing staff complement so we can move to full co. That's the nice thing, is that there is no once-off fee or costs. There will be a cost in terms of a monthly payment to employees, shift allowance. In terms of our calculations, we'll be saving money on a net basis because the overtime that we're currently paying should reduce. Overall, even from a cost perspective, we think it's a very good move.
Thank you very much for the answers. There are no more questions online. I believe there is a question on the conference call, if we could move to that. Thank you. Thank you. The question comes from Richard Hatch of Berenberg.
Yeah, thanks very much. Yeah. Morning, Kobus and Deon, and thanks for the call. My questions are mainly focused around costs and where you think you can kinda take the business to, particularly, at Barberton and Evander. You sort of talked about efforts to bring costs down via productivity improvements at Barberton, which I understand, and it'd be great if you could kinda just perhaps give us a bit of a steer as to what you kinda think you can get the operation running to. The same kinda goes for Evander, as we think about the medium-term production profile as you move sort of through 2024, 2025, 2026 levels. That's the first one. Thanks.
Thanks, Richard. Yeah. You know, Barberton as a complex should produce that includes the BTRP, should produce 80,000 ounces a year. Sorry, 100,000 ounces, including the BTRP, 80,000 or plus from underground. I think we're trying to be quite conservative here in terms of our expectations of what the new restructuring will yield in terms of productivity improvements. With an underground mine, as we've said before, pretty much 80% of your costs are fixed. You know, it's difficult to give you exact guidance other than to say, you know, you can assume an increase in production and a resultant decrease in unit costs. The costs in Barberton, as we've said, or at Barberton as a complex, on an absolute basis, are well controlled.
Wages, electricity, reagents and mining costs and everything else. That's not the issue. The issue is just producing more units and that's really the focus. As far as Evander is concerned, I think, the team is really doing a really good job. I mean, we're producing at an all-in sustaining cost, I think for the whole last six months of $1,050 an ounce. It's very attractive. There's very little scope to actually get that much further down. Clearly also, the impact of renewables should come through in the medium term, you know, we need to produce as much renewable energy and then subsidize the cost of power, and that will sure also assist from a cost perspective.
Currently, 25% odd of your overall costs relate to electricity. Obviously, to the extent that you can have renewables and you have a capital cost and then obviously a cost of repayment of that capital, that should very positively impact your cost of electricity over the medium to longer term. Those are really are the focus areas.
Okay. Much appreciated. Thanks. The second one, just on Royal Sheba. Sounds interesting as to what you think you can do with that project. Again, are you in a position to start talking or at least guiding to where you think costs might come in at? You know, would it be sort of more in line with some of the other underground operations that you've got there, above ground? Is it, you know, what's the kind of view on them on cost there?
Yeah. Richard, I think we'll be able by the end of March of this year to put out a proper project plan for Royal Sheba. The teams have been doing some very good work. Currently the thinking is that the most optimal way of dealing with Royal Sheba would be to actually construct a mill, crushing and milling circuit on site at Sheba, and then pump that material across through our underground workings. It's only about 500 meters of development or actually lace that needs to be done. Then via Fairview all the way to the BTRP.
You know, that sort of is what we're thinking in terms of the just the logistics and then mechanized, as we've said, very few people, 50, 60 people underground, massive mining methods, long hole open stoping. If you look at a, again, it's early and I wouldn't wanna commit, but certainly we'd like to target a all-in sustaining cost for a project like that of let's say $1,200 or below. It's a long life project. It's open a depth. Currently in terms of presentation, we were saying 25,000 odd ounces, but, you know, for a project like that, we'd like to push some more tons, maybe 40,000-50,000 tons once it's developed. It then becomes attractive in our view.
As we've said, it's different to the rest of what we're doing at Barberton. Grade is lower, you know, this is mechanized from surface. You know, that should certainly assist from a cost perspective.
Yeah. Makes sense. Okay. Thank you. The last one is just on Mintails. I mean, you talked a bit about permitting. It's something you're comfortable with, but can you just remind us what the key kinda gates are to go through just in terms of permitting on Mintails and what we need to get that operation up and running?
There's really two primary, well, three permits. First is environmental authorisation. That's in progress. We've actually, we have to say that up to now, the authorities have been very supportive, given the situation in that part of the world. They recognize that sort of, they need a Pan African to come in here to clean up, to the benefit of all parties. It's an environmental authorisation, it's a water use licence, and we'd hope to get those permits done by before the end of June. We actually don't need a water use licence if we want to start construction. You need a permit from the National Nuclear Regulator, given the fact that there's some radioactivity on site, nothing major. That's also something we're working on.
We don't foresee permitting being an issue. It's an interesting one because, you know, South Africa has a lot of bad publicity in terms of the mining sector. Certainly there are challenging issues. If you look at the permitting side, you know, where else in the world can you have a project like this permitted in 12 months? We think that's very attractive. We're working very hard to get it done so we can start construction. Clearly, the economics has changed since we did the feasibility with the gold price having increased like it has. We're very excited about Mintails and getting going.
Sounds good. All right. Look forward to following it as it goes along. Much appreciated. Thanks, Richard.
Great. Thank you. Thank you to everybody for attending.