Last checked at (Sharecast News) - Pan African has entered into a conditional agreement to acquire the entire issued share capital of Blyvoor Gold Operations from Blyvoor Gold, it announced on Wednesday, for just over £5m.
The AIM-traded firm said the acquisition would include six historical tailings storage facilities with total mineral resources of more than 1.4 million ounces of contained gold.
It said a technical study to pre-feasibility level indicated the potential to produce 25,000 to 30,000 ounces of gold by processing six million tonnes of tailings each year over a mine life of 15 years, extendable to 25 years with the inclusion of inferred mineral resources.
Pan African said it had a "demonstrable track record" of developing and operating similar high-margin tailings processing operations at its Barberton and Evander tailings retreatment plants and its Elikhulu operations.
The company described a "staged" acquisition process, with a three-month initial fatal-flaw due diligence period, following which it could choose to proceed with a definitive feasibility study over the following nine months to December 2022.
Pan African could then, at its sole discretion, choose to acquire Blyvoor Operations for cash consideration of ZAR 110m (£5.1m), to be funded from internal cash resources.
Blyvoor Operations owns a total of six historical tailings storage facilities.
During 2020, independent consultant Minxcon completed a technical study to pre-feasibility study level for the Blyvoor facilities, and quantified the mineral resources at 142.9 million tonnes, with an in-situ grade of 0.31 grams of gold per tonne, for an estimated gold content of more than 1.4 million ounces.
"Pan African is pleased to have secured the right to the Blyvoor tailings, which is one of the last remaining large-scale gold tailings resources available in South Africa," said chief executive officer Cobus Loots.
"We look forward to progressing our studies on this opportunity in the year ahead, and we are hopeful that we can ultimately demonstrate a compelling project, for the benefit of all stakeholders.
"Pan African is poised to grow its tailings retreatment operations in the years ahead, adding additional long-life, high-margin production to our already attractive portfolio of assets."
At 1151 GMT, shares in Pan African Resources were up 5.12% at 16.82p.
18 Feb 2020 10:45
Evander performance underpins first half for Pan African
(Sharecast News) - Pan African Resources reported a 13.6% increase in total gold sold in its interim results on Tuesday, to 90,602 ounces, which it put down to an increase in production by Evander Mines.
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