Pan African Resources Regulatory News (PAF)

5 Oct 2005 07:00

Pan African Resources PLC05 October 2005 5th October 2005 Pan African Resources ("Pan African" or "The Company") Pan African Acquires an Interest in JV in the Central African Republic Pan African Resources PLC (AIM:PAF) the African based gold exploration companyannounces that it has entered into a joint venture with International MiningInvestments Ltd and Goldiam SARL to do exploration in the Central AfricanRepublic ("CAR"). • Despite the CAR being relatively unexplored, a near-surface grassroots 2m oz greenstone gold deposit has recently been delineated in the country by another company • Pan African and its partners exploration activity is being managed by Pangea Exploration (Pty) Ltd with a proven track record of discovering gold deposits of this nature • The first phase of the exploration is underway Pan African and International Mining Investments Ltd (a totally independentcompany from Pan African) will each hold a 45% contributory stake in the jointventure. The new joint venture through Goldiam SARL (which is Pan African'sindependent local joint venture partner and which holds 10% in the joint ventureas a free carry for providing in country logistical services), has been grantedan exclusive Exploration License (the Bogoin Exploration License) and threeReconnaissance Permits (the Dekoa, Bozoum and Baboua Permits) in accordance withthe Country's new Mining Code. Goldiam SARL will serve as the legal operatingentity for the joint venture in the CAR. Failure by either party toproportionately contribute to the joint venture will result in dilutionproportionate to cash contribution. Pan African and its partners hold title to 2 of the 4 known major greenstonebelts in the CAR. These greenstone belts are part of the craton hosting theKilo-Moto gold camp in the Democratic Republic of Congo, which has produced morethan 10 million ounces of gold. The initial exploration activity is focusing onthe Bogoin Exploration License where a number of shallow gold intercepts weremade by GTZ (Deutsche Gesellschaft fur Technische Zusammenarbeit) in the early1990's. Two of the best intercepts were 17,38g/t over 19m and 5.05g/t over 20m.These results were never followed up. A gold soil geochemical anomaly (alsodelineated by GTZ) with a strike extent of more than 1km, north of theseintercepts is currently untested. The main target is banded ironstone-hostedgold mineralisation associated with major shear zones that also remainsunexplored. Recent exploration activity has shown that the Central African Republic despitebeing relatively unexplored is prospective for gold. A North American companyhas announced a grassroot discovery of a 2m ounce gold deposit in the CAR atPassendro circa 300 km east of the Company's Bogoin project and circa 150 kmeast of the Company's Dekoa project. Of significance is that the Company's twodeposits at Bogoin and Dekoa outcrop on surface and are similar togreenstone-hosted deposits elsewhere in the world. The company and its partners have an experienced geological team managed byPangea Exploration (Pty) Ltd ("Pangea") in place within the CAR and the firstphase of the exploration program is well advanced. Pangea has a proven trackrecord with regard to greenstone gold exploration in Africa, being responsiblefor the discovery of various gold deposits such as Tulawaka, Buzwagi and GoldenRidge in Tanzania. A commission payment is due to Pangea Exploration (Pty) Ltd ("Pangea") forintroducing Pan African to the joint venture opportunity. The total commissionbecomes due in three annual installments of £105,000, which will only be payablefor as long as Pan African remains part of the joint venture and subject to PanAfrican holding sufficient funds to both make each payment and fund theexploration activities required. As the consideration potentially payable is both conditional and deferred, suchconsideration will be increased by the percentage that the price of any futurefundraising prior to each payment, is above 1.75p per share at the time of eachpayment. Pan African has the right, but not the obligation, to settle suchfuture payments by the issue of new shares in Pan African, priced at the same asthe future fundraising price. Pan African has the right to terminate the joint venture agreement at any timeand will not incur any penalties for doing so. Pan African currently has fundsof £480,000 (including the proceeds from the share subscription as describedbelow). Separate to the joint venture agreement, Goldiam SARL has agreed to subscribe to2,750,000 Pan African ordinary shares at a price of 2p per share for a totalconsideration of £55,000. The closing market-price of the Company's ordinaryshares on 3 October 2005 was 2.38p. "The company's involvement in the CAR is in line with delivering on ourcorporate strategy to enhance shareholder value by developing world classdeposits in favourable areas of Africa." commented Jan Nelson, CEO of PanAfrican Resources. - ENDS - Enquiries: Pan African Resources Evolution Securities Parkgreen CommunicationsJan Nelson, CEO Tim Redfern Justine Howarth / Victoria Thomas+27 11 886 1211 +44 (0)20 7071 4312 +44 (0)20 7493 3713Colin Bird+44 (0)20 7584 2155 This information is provided by RNS The company news service from the London Stock Exchange