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(Alliance News) - Pan African Resources PLC on Tuesday said the construction of its Mintails tailings retreatment plant will start after raising ZAR2.5 billion in debt funding for the project.
The Rosebank-headquartered gold producer in October last year acquired Mogale Gold Pty Ltd and Mintails' SA Soweto Cluster Pty Ltd for ZAR50.0 million. Mintails Mining SA, which owns two mines, was placed in provisional liquidation in 2018.
On Tuesday, Pan African said the Mineral Resources & Energy Department has granted an environmental authorisation for the Mintails project.
On the closure of the senior debt facility, the gold producer said on Tuesday all conditions precedent to its ZAR1.30 billion senior debt tranche, earmarked to fund the Mintails, had been fulfilled and the senior debt facility had become effective.
The debt facility brings the full upfront capital to ZAR2.5 billion for the project's development. In December, the company raised ZAR800 million through its inaugural domestic medium-term note programme. It completed a ZAR400 million derivative funding structure with RMB in March this year.
"This important milestone completes the funding package for Mintails' development capital," Pan African CEO Cobus Loots said.
Full-scale construction of the tailings retreatment plant at Mogale will now commence, with expected production of 50,000 ounces per year for more than 20 years.
The senior debt facility was underwritten by Rand Merchant Bank, a division of FirstRand Bank Ltd, with Nedbank Ltd as co-financier.
By Artwell Dlamini, Alliance News reporter
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