Pan African Resources PLC
(Incorporated and registered in
England and Wales under Companies Act 1985 with registered
number 3937466 on 25 February
2000)
AIM Code: PAF
JSE Code: PAN
ISIN: GB0004300496
(“Pan African” or the “Company” or
the “Group”)
FURTHER OPERATIONAL UPDATE AND
SIGNIFICANT INCREASE IN BARBERTON’S ROYAL SHEBA GOLD RESOURCE
Following the operational update released on 2 March 2018, Pan African is pleased to provide
further information on the Group’s operations and growth
projects. Key points can be summarised as follows:
- Barberton Mines is on track to produce approximately 50,000oz
of gold in the second half of the 2018 financial year, an increase
of approximately 23% from the first half of the 2018 financial
year;
- installation of the regrind mill at the Barberton Tailings
Retreatment Plant (“BTRP”) remains on schedule and on budget;
- construction of the Elikhulu Tailings Retreatment Plant
(“Elikhulu”) remains ahead of schedule, with first gold production
expected in August 2018;
- feasibility study completed which confirms viability of
post-commissioning capacity increase of Elikhulu to allow the plant
to process tailings tonnes currently assigned to the Evander
Tailings Retreatment Plant (“ETRP”), with resultant cost and
throughput benefits;
- a 100% increase in Mineral Resources at Barberton’s Royal Sheba
Project to 720,000oz;
- as previously communicated, Evander Mines’ labour consultation
process is in progress, with finalisation expected prior to the end
of the financial year; and
- a re-assessment of the feasibility of Evander Mine’s Egoli
Project is in progress.
Gold production from Barberton Mines
As anticipated, recent grades as announced on 2 March 2018 from the Fairview Mine’s 11-block
MRC 272 and 358 platforms, have resulted in an increase in gold
production at Barberton Mines.
Based on current grades and the anticipated mining profile,
Barberton Mines is expected to produce approximately 50,0000oz for
the second half of the 2018 financial year, an increase of
approximately 23% from the first half of the 2018 financial year,
in line with production guidance from the full financial year.
To improve future flexibility and sustain gold production,
development to the next high grade platform (256 platform), will
commence early in the 2019 financial year and average grades of
28.4g/t over 5.2 metres are estimated over the 95 metres strike
length. The 256 platform is expected to be in full production in
the 2020 financial year to sustain production from the MRC section
over the next 5 years.
BTRP regrind mill construction update
The construction of the regrind mill is proceeding according to
schedule, with commissioning anticipated in the last week of
April 2018. On commissioning of the
regrind mill, production at the BTRP is expected to increase to
approximately 21,000oz per annum.
Elikhulu construction and ETRP study updates
Construction at Elikhulu is progressing ahead of schedule with
first gold expected in August 2018.
Ramp up to full production of approximately 55,000oz per annum is
expected to take no longer than two months, after which Elikhulu is
estimated to produce gold at an all-in sustaining cost of
production of below US$650/oz, at the
prevailing ZAR:USD exchange rate of R11.75:1. In conjunction with
the ETRP, these two operations are expected to produce more than
70,000oz per annum.
A DRA Global feasibility study has concluded that the ETRP’s
throughput of approximately 200,000 tonnes per month can be
incorporated into the Elikhulu Project with limited additional
capital. This will be done post commissioning of the Elikhulu
Project and should result in the existing ETRP throughput
benefitting from Elikhulu’s lower cost structure and higher
recoveries.
Barberton Mines’ Royal Sheba Project
Pan African previously communicated that the Royal Sheba orebody
has the potential to deliver approximately 30,000oz per annum at a
relatively low production cost. The Company has mandated DRA Global
to undertake a life-of-mine technical feasibility study on the
Royal Sheba orebody, which is planned to be completed during
2018.
The Royal Sheba orebody forms part of the Barberton Mine complex
and was historically mined on a small scale (approximately 2,000
tonnes per month) to a depth of 340 metres below surface. Due to
poor economic returns resulting from the low tonnage mining
profile, and the prevailing low gold price at that time, it was
closed during 1996.
In the 2010 financial year, a concept study was completed by
Turgis Consulting (“Turgis Study”) with the aim of re-opening the
mine as a larger, mechanised, stand-alone operation. The Turgis
Study found that it was a viable proposition, but required a
significant amount of capital expenditure for a new shaft system to
be sunk from the surface and the construction of a new gold
plant.
Since the Turgis Study was completed, several synergies have
been identified at the Barberton Mines complex, which indicate that
the Royal Sheba orebody could be a viable economic proposition with
a materially lower capital investment than previously
envisaged.
The Company has revisited the Royal Sheba Mineral Resource, and
the process focussed on the geology and mineralisation of the
deposit, incorporating a full 3D geological modelling exercise on
the structural, lithological and mineralisation components of the
deposit. The combination of these three components resulted in a
robust and fit for purpose 3D geological model highlighting the
increase in the Royal Sheba Mineral Resources, adjacent to and
below the current Royal Sheba mine infrastructure.
The 3D geological model and coded composite data set was
subjected to full statistical and geostatistical analyses by
considering 10 domains within the Royal Sheba deposit. The final
output of the 3D geological model and Mineral Resource estimate
honours all of the available data. Checks and validation techniques
applied to the estimates ensured a robust Mineral Resource estimate
of the Royal Sheba orebody, the results of which are tabulated and
reconciled against the previous Mineral Resource estimate in the
table below. The measured and indicated categories of the Royal
Sheba orebody has doubled to 0.48Moz (30
June 2017: 0.24Moz). The increase in the Royal Sheba Mineral
Resource is summarised as follows:
|
Updated
Mineral Resource statement Royal Sheba Project |
|
Previous
Mineral Resource statement Royal Sheba Project |
Category |
Tonnes |
Grade |
Contained gold |
Tonnes |
Grade |
Contained gold |
Million |
g/t |
Moz |
Million |
g/t |
Moz |
Measured |
2.72 |
3.91 |
0.34 |
0.39 |
4.15 |
0.05 |
Indicated |
1.34 |
3.22 |
0.14 |
1.35 |
4.35 |
0.19 |
Inferred |
1.83 |
4.05 |
0.24 |
0.86 |
4.35 |
0.12 |
Total |
5.89 |
3.80 |
0.72 |
2.60 |
4.32 |
0.36 |
The updated Mineral Resources statement is stated over a larger
down dip extent than the previous Mineral Resource statement due to
variogram model parameters applied. The updated Mineral Resources
statements are reported in accordance with the South African Code
for the Reporting of Exploration Results, Mineral Resources and
Mineral Reserves, 2016 edition. Cut-off values are calculated at
2.5g/t applying a gold price of R600,000/kg (US$1,435/oz and R13.00:1). Mineral Resources are
reported inclusive of Mineral Reserves. All updated Mineral
Resources reported exclude geological structures and are reported
as in-situ tonnes. Any discrepancies in totals are due to
rounding.
The following tonnage discount factors have been applied to the
updated Mineral Resources:
•
geological loss of 5% for the Measured category;
•
geological loss of 10% for the Indicated category; and
•
geological loss of 15% for the Inferred category.
Additional effects of mining and recovery losses have been
considered in the cut-off grade calculations.
The competent person for Pan African Resources, Mr Barry Naicker, the group mineral resource
manager, has reviewed and signed off the updated Mineral Resource
for Royal Sheba. He is a member of the South African Council for
Scientific Professions (400234/10). Mr Naicker has 17 years of
experience in economic geology and mineral resource management. He
is based at 1st Floor, The Firs, corner Cradock and Biermann
Avenues, Rosebank 2196, Gauteng.
Evander Mines labour consultation process and gold
production
As announced on 2 March 2018,
Evander Mines is currently in a consultation process with its
labour in terms of section 189 of the South African Labour
Relations Act, 66 of 1995 (“Section 189 Process”). Further
announcements will be made in due course, with the process expected
to be finalised before the end of the 2018 financial year.
Gold production from Evander Mines will be dependent on the
outcome of the labour consultation process and the review of the
8-shaft operations. As previously communicated, Pan African is
prioritising lower cost, high margin ounces in the current weak
rand gold price environment. A reduction in non-paying gold
production will therefore benefit Group margins and sustainable
cash flows.
Egoli Project update
Following the recent announcement on the Section 189 Process at
Evander Mines, the Group will be re-assessing the feasibility of
the Egoli Project as a stand-alone project by the end of the 2018
financial year.
The information contained in this announcement has not been
reviewed or reported on by Pan African’s auditors and is the
responsibility of the directors of Pan African.
For further information on Pan African, please visit the
Company’s website at http://www.panafricanresources.com/
28 March 2018
Contact information |
Corporate Office
The Firs Office Building
1st Floor, Office 101
Cnr. Cradock and Biermann Avenues
Rosebank, Johannesburg
South Africa
Office: + 27 (0) 11 243 2900
Facsimile: + 27 (0) 11 880 1240 |
Registered Office
Suite 31
Second Floor
107 Cheapside
London
EC2V 6DN
United Kingdom
Office: + 44 (0) 207 796 8644
Facsimile: + 44 (0) 207 796 8645 |
Cobus
Loots
Pan African Resources PLC
Chief Executive Officer
Office: + 27 (0) 11 243
2900 |
Deon Louw
Pan African Resources PLC
Financial Director
Office: + 27 (0) 11 243 2900 |
Phil Dexter
St James's Corporate Services Limited
Company Secretary
Office: + 44 (0) 207 796 8644 |
John Prior / Paul
Gillam
Numis Securities Limited
Nominated Adviser and Joint Broker
Office: +44 (0) 20 7260 1000 |
Sholto Simpson
One Capital
JSE Sponsor
Office: + 27 (0) 11 550 5009 |
Ross Allister/James
Bavister/David McKeown
Peel Hunt LLP
Joint Broker
Office: +44 (0) 207 418 8900 |
Julian Gwillim
Aprio Strategic Communications
Public & Investor Relations SA
Office: +27 (0)11 880
0037 |
Jeffrey Couch/Neil
Haycock/Thomas Rider
BMO Capital Markets Limited
Joint Broker
Office: +44 (0) 207 236 1010 |
Bobby
Morse
Buchanan
Public & Investor Relations UK
Office: +44 (0)20 7466 5000
Email: PAF@buchanan.uk.com |
Website:
www.panafricanresources.com |
Glossary of technical terms:
Au |
Chemical symbol for gold |
Cut-off Grade |
The lowest grade value that is
included in a resource statement |
Grade |
The proportion of a mineral within a
rock or other material. For gold mineralisation this is usually
reported as grams of gold per tonne of rock (g/t) |
g/t |
Grammes per tonne |
Indicated Mineral
Resource |
That part of a mineral resource for
which tonnage, densities, shape, physical characteristics, grade
and mineral content can be estimated with a reasonable level of
confidence. It is based on exploration, sampling and testing
information gathered through appropriate techniques from locations
such as outcrops, trenches, pits, workings and drill holes. The
locations are too widely or inappropriately spaced to confirm
geological and/or grade continuity but are spaced closely enough
for continuity to be assumed |
Inferred Mineral
Resource |
That part of a mineral resource for
which tonnage, grade and mineral content can be estimated with a
low level of confidence. It is inferred from geological evidence
and assumed but not verified geological and/or grade continuity. It
is based on information gathered through appropriate techniques
from locations such as outcrops, trenches, pits, workings and drill
holes that may be limited, or of uncertain quality and
reliability |
Life of Mine |
The time in which, through the
employment of the available capital, the ore reserves--or such
reasonable extension of the ore reserves as conservative geological
analysis may justify--will be extracted. |
m |
metre |
Mineral Resource |
A concentration or occurrence of
material of economic interest in or on the Earth's crust in such a
form, quality, and quantity that there are reasonable and realistic
prospects for eventual economic extraction. The location, quantity,
grade, continuity and other geological characteristics of a Mineral
Resource are known, estimated from specific geological knowledge,
or interpreted from a well constrained and portrayed geological
model |
Measured Resource |
That part of a Mineral Resource for
which tonnage, densities, shape, physical characteristics, grade
and mineral content can be estimated with a high level of
confidence. It is based on detailed and reliable exploration,
sampling and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits,
workings and drill holes. The locations are spaced closely
enough to confirm geological and grade continuity |
Moz |
Million troy ounces |
Orebody |
Mining term to de?ne a solid mass of
mineralised rock which can be mined pro?tably under current or
immediately foreseeable economic conditions "ore" a mineral deposit
that can be extracted and marketed profitably |
Ore Reserves |
The economically mineable part of a
Measured or Indicated Mineral Resource demonstrated by at least a
Preliminary Feasibility Study. This Study must include adequate
information on mining, processing, metallurgical, economic and
other relevant factors that demonstrate, at the time of reporting,
that economic extraction can be justified. A Mineral Reserve
includes diluting materials and allowances for losses that may
occur when the material is mined |
Ounce / oz |
Troy ounce, equivalent to 31.103477
grams |
Probable Mineral
Reserve |
The economically mineable part of an
Indicated and, in some circumstances, a Measured Mineral Resource
demonstrated by at least a Preliminary Feasibility Study. This
Study must include adequate information on mining, processing,
metallurgical, economic, and other relevant factors that
demonstrate, at the time of reporting, that economic extraction can
be justified |
Proven Mineral
Reserve |
The economically mineable part of a
Measured Mineral Resource demonstrated by at least a Preliminary
Feasibility Study. This Study must include adequate information on
mining, processing, metallurgical, economic, and other relevant
factors that demonstrate, at the time of reporting, that economic
extraction is justified |
t |
Tonne (1 million grams) |