Last checked at 15 Sep 2015 16:00
PAN AFRICAN RESOURCES PLC - 2015 Abridged Mineral Resource & Mineral Reserve ReportPAN AFRICAN RESOURCES PLC - 2015 Abridged Mineral Resource & Mineral Reserve Report
PR Newswire
London, September 15
Pan African Resources PLC
(Incorporated and registered in England and Wales under Companies Act 1985 with registered number 3937466 on 25 February 2000)
Share code on AIM: PAF
Share code on JSE: PAN
ISIN: GB0004300496
("Pan African Resources" or the "Company" or the "Group")
2015 Abridged Mineral Resource & Mineral Reserve Report
Pan African Resources PLC (AIM: PAF, JSE: PAN), the African focused precious metals producer, is pleased to announce that the 2015 Abridged Mineral Resource and Mineral Reserve Report ("MR&MR") has now been published and is available on the Company's website at www.panafricanresources.com. A summary of the report, including the Group Mineral Resource and Mineral Reserve statement as at 30 June 2015 has been provided below.
Overview
0.3 million ounces (“Moz”) or 3.0% gross annual increase in Group’s gold reserve to 10.4Moz (2014: 10.1Moz) Increase in the Group’s gold reserve due to the extension of the Main Reef Complex (“MRC”) orebody on Fairview Mine (0.3Moz), at Barberton Mines 1.6Moz or 4.8% decrease in Group’s gold resource to 31.9Moz (2014: 33.5Moz) 20,000oz or 3.9% decrease in Group’s Platinum Group Elements (“PGE”) reserve to 0.50Moz (2014: 0.52Moz) No material change in Group’s PGE resource, 0.6Moz (2014: 0.6Moz) Exploration drilling and organic growth in accessing and development of orebodies at the Group's key assets progressed and has incremental resource ounces added Ongoing conversion of resources to reserves expected to continue to increase life of mine production profiles Preliminary economic assessments for Evander South brownfields project (“Evander South Project”) and ElikhuluGold
Group Gold Mineral Resources
The Group's attributable gold Mineral Resources decreased from 33.5 Moz in June 2014 to 31.9Moz in June 2015, equating to an annual decrease of 1.6Moz, or 4.8%. Of this variance, a decrease of 1.9Moz can be attributed to Evander Mines and an increase of 0.3Moz to Barberton Mines.
| As at 30 June 2015 | |||||||||||
| Tonnes | Grade | Contained Gold | |||||||||
| Category | (million) | (g/t) | kg | Moz | |||||||
| Mineral Resource | Measured | 6.5 | 10.35 | 67,471 | 2.2 | ||||||
| Indicated | 273.7 | 2.33 | 637,457 | 20.5 | |||||||
| Inferred | 38.6 | 7.43 | 286,990 | 9.2 | |||||||
| Pan African Resources | Total | 318.8 | 3.11 | 991,918 | 31.9 | ||||||
The decrease in Mineral Resources can be attributed to inflationary cost drivers in the reporting of the 2015 Mineral Resources. The 0.3Moz positive variance in contained gold at Barberton Mines was a result of adding new mineral resources from the extension of the MRC orebody on Fairview Mine.
Group Gold Mineral Reserves
The Group's attributable Mineral Reserves increased from 10.1Moz in June 2014 to 10.4Moz in June 2015 - an annual increase of 0.3Moz, or 3.0%. Of this variance, 0.3Moz increase can be attributed to Barberton Mines.
| As at 30 June 2015 | |||||||||||
| Tonnes | Grade | Contained Gold | |||||||||
| Category | (million) | (g/t) | kg | Moz | |||||||
| Mineral Reserve | Proved | 3.9 | 7.27 | 28,474 | 1.0 | ||||||
| Probable | 81.0 | 3.62 | 293,478 | 9.4 | |||||||
| Pan African Resources | Total | 84.9 | 3.79 | 321,952 | 10.4 | ||||||
The total increase in the Mineral Reserves can be attributed to the conversion of Mineral Resources at Barberton Mines, the extension of MRC orebody at Fairview Mine.
Platinum Group Elements
Group PGE Mineral Resources
The Group's attributable PGE Mineral Resources did not change materially in the year under review.
| As at 30 June 2015 | |||||||||||
| Tonnes | Grade | Contained PGE’s | |||||||||
| Category | (million) | (g/t) | kg | Moz | |||||||
| Mineral Resource | Measured | 1.6 | 2.46 | 3,937 | 0.1 | ||||||
| Indicated | 3.2 | 3.66 | 11,574 | 0.4 | |||||||
| Inferred | 1.2 | 2.90 | 3,446 | 0.1 | |||||||
| Pan African Resources | Total | 6.0 | 3.14 | 18,957 | 0.6 | ||||||
Group PGE Mineral Reserves
The Group's attributable PGE Mineral Reserves decreased from 0.52Moz in June 2014 to 0.50Moz in June 2015 - an annual decrease of 20,000oz or 3.9%. This was due to the re-mining of the Buffelsfontein tailings dams in the current year.
| As at 30 June 2015 | Tonnes | Grade | Contained PGE’s | ||||||||
| Category | (million) | (g/t) | kg | Moz | |||||||
| Mineral Reserve | Proved | 1.6 | 2.46 | 3,937 | 0.1 | ||||||
| Probable | 3.2 | 3.56 | 11,574 | 0.4 | |||||||
| Pan African Resources | Total | 4.8 | 3.20 | 15,511 | 0.5 | ||||||
Group organic growth
Group: Exploring the orebody - exploration drilling
| Operation | Total metres | No. of boreholes | Average channel width (cm) | No. of intersections above cut-off | Average grade (g/t) | Total expenditure (Rm) |
| Barberton Mines | 11,491 | 157 | 130 | 72 | 19.79 | 8.5 |
| Evander Mines | 632 | 12 | 132 | 8 | 16.30 | 0.6 |
| Phoenix Platinum | – | – | – | – | – | – |
Highlights:
Exploration drilling projects at Barberton Mines yielded positive results, confirming the down dip extension of the high grade 11 Block of the MRC ore body by a further 170 meters. This extension to the MRC orebody resulted in an annual increase in Barberton Mines’ Mineral Reserves by 236,162 oz, thereby extending the life of mine of Barberton Mines to 20 years.
The Fairview MRC orebody has been the primary gold contributor towards gold produced at Barberton Mines. This orebody is an epigenetic hydrothermal lode-gold deposit with a strike length that ranges between 70m – 120m and also extending to depth. Gold mineralisation is associated with arsenopyrite and pyrite with an average reserve grade of 35 g/t declared for the MRC. The mineralised widths range between 7m – 15m.
Recent borehole results of the 11 Block are detailed hereunder:
| Borehole number | Channel width (cm) | Grade (g/t) |
| Bh 5940 | 687 | 53.30 |
| Bh 5816 | 691 | 120.03 |
| Bh 5849 | 1626 | 50.22 |
| Bh 5864 | 1383 | 43.82 |
Accessing the orebody - on-reef development
| Operation | Total on-reef development (m) | Average grade (g/t) |
| Barberton Mines | 1,041 | 5.01 |
| Evander Mines | 528 | 22.72 |
| Phoenix Platinum | – | – |
Barberton Mines: Developing the orebody - capital ore reserve projects
| Project | Y/E 30 June 2015 (m) | Y/E 30 June 2014 (m) | Y/E 30 June 2013 (m) | Potential resource target (oz) |
| Sheba – pillar development | 824 | 351 | 317 | 23,599 |
| Sheba – Edwin Bray to Thomas and Joe’s Luck area | 5 (equipping incline shaft) | 171 | 102 | 13,246 |
| Fairview – 11 Level Royal Reef | 0 (equipping old main shaft) | 0 (equipping old main shaft) | 0 | 17,000 |
| Fairview – 1# ore reserve opening | 84 | 154 | 179 | 14,821 |
| Fairview – 3 Shaft deepening | 26 | 0 | 228 | 1,600 |
| Fairview – 64-68 Level | 447 | 295 | 601 | 840,704 |
| Sheba Western C | 295 | 71 | 0 | 32,022 |
| Royal Sheba | 165 | 0 | 0 | 206,750 |
| Consort – 33-45PC | 258 | 193 | 252 | 10,000 |
| Consort – MMR pillar development | 0 | 173 | 129 | (new target area) |
| 8-3 # | 327 | 253 | 900 |
Evander Mines: Developing the orebody - capital ore reserve projects
| Project | Y/E 30 June 2015 (m) | Y/E 30 June 2014 (m) | Y/E 30 June 2013 (m) | Potential resource target (oz) |
| 2 Decline 24–25 Level | 904 | 685 | 554 | 1,200,000 |
| 25 A block ventilation | 10 | 925 | 124 |
Growth projects:
An internal technical team from Evander Mines has been assigned to assess the merits of progressing the Evander South Project to the level of a feasibility study. The Evander South Project is a potentially attractive mining opportunity whereby the Kimberley reef can be exploited at shallow depths, commencing at 300m below surface.
In light of the positive results of the Evander Tailings Retreatment Plant, the Company is progressing studies on the viability of constructing “Elikhulu”, a tailings retreatment plant which can potentially treat slimes at a processing capacity of up to 12 million tonnes per annum at a head grade of 0.28g/t from the Winkelhaak, Leslie and Kinross tailings storage facilities. The total mineral resource for Elikhulu is 165Mt at 0.28g/t (1.5Moz).
The Sheba and New Consort tailings dams will provide potential future sources of tailings which will support the increased Barberton Tailings Retreatment Plant (“BTRP”) life of operation to 15 years (2014: 12 years). The BTRP has a mineral reserve of 0.6Moz (13.4Mt at 1.5 g/t). The BTRP payback period was 18 months from commissioning on 1 July 2013, therefore the increase in the BTRP life of operation is expected to result in further surplus free cash flows.
Reporting in compliance with SAMREC Code
To meet the requirement of the South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves ("SAMREC Code") that the material reported as a Mineral Resource should have "reasonable and realistic prospects for eventual economic extraction", Pan African Resources has determined an appropriate cut-off grade which has been applied to the quantified mineralised body. In determining the cut-off grade, Pan African Resources uses a gold price of R500 000/kg. At our underground mines, the optimal cut-off is defined as the lowest grade at which an orebody can be mined such that the total profits, under a specified set of mining parameters, are maximised. The Mineral Resource optimiser tool that was accordingly developed in-house was applied to the Mineral Resource inventory.
The optimiser programme requires the following inputs to convert the Mineral Resource to the Mineral Reserve:
the database inventory of all mineral resource blocks; an assumed gold price - ZAR400 000/kg; planned production rates for each mine; mine call factor; plant recovery factors; and planned cash operating costs and other efficiency factors, which are calculated using historical achievements as a baseline.The Mineral Reserves represent that portion of the Measured and Indicated Mineral Resources above cut-off in the life of mine plan, and have been estimated after consideration of the modifying factors affecting extraction. A range of disciplines has been involved at each mine in the life of mine planning process including geology, surveying, planning, mining engineering, rock engineering, metallurgy, financial management, human resources management and environmental management.
Note: Mineral Resources are inclusive of the Mineral Reserve, unless otherwise stated. Rounding of numbers contained in this announcement may result in minor computational discrepancies.
Competent Person
The competent person for Pan African Resources, Mr Barry Naicker, the group Mineral Resource Manager, signs off the MR&MR for the Group and has reviewed and approved the information contained in this announcement in writing. He is a member of the South African Council for Scientific Professions (400234/10). Mr Naicker has 14 years of experience in economic geology and mineral resource management.
He is based at 1st Floor, The Firs, cnr. Cradock and Biermann Avenues, Rosebank, 2196, Gauteng.
Contact Details
Corporate OfficeThe Firs Office Building1st Floor, Office 101Cnr. Cradock and Biermann AvenuesRosebank, JohannesburgSouth AfricaOffice: + 27 (0) 11 243 2900Facsmile: + 27 (0) 11 880 1240
Registered OfficeSuite 31Second Floor107 CheapsideLondonEC2V 6DNUnited KingdomOffice: + 44 (0) 207 796 8644Facsmile: + 44 (0) 207 796 8645
| Cobus Loots | Deon Louw |
| Pan African Resources PLC | Pan African Resources PLC |
| Chief Executive Officer | Financial Director |
| Office: + 27 (0)11 243 2900 | Office: + 27 (0) 11 243 2900 |
| Phil Dexter | John Prior / Paul Gillam / James Black |
| St James's Corporate Services Limited | Numis Securities Limited |
| Company Secretary | Nominated Adviser & Joint Broker |
| Office: + 44 (0)207 796 8644 | Office: +44 (0)207 260 1000 |
| Sholto Simpson | Matthew Armitt / Ross Allister |
| One Capital | Peel Hunt LLP |
| JSE Sponsor | Joint Broker |
| Office: + 27 (0)11 550 5009 | Office: +44 (0)020 7418 8900 |
| Julian Gwillim | Daniel Thöle |
| Aprio Strategic Communications | Bell Pottinger PR |
| Public & Investor Relations SA | Public & Investor Relations UK |
| Office: +27 (0)11 880 0037 | Office: + 44 (0)203 772 2500 |
www.panafricanresources.com