New CAR Exploration Licences

13 Mar 2006 07:01

Pan African Resources PLC13 March 2006 13 March 2006 Pan African Resources PLC ("Pan African" or "the Company") New exploration licenses in the, Central African Republic and Increase in JV Holding Pan African Resources PLC (AIM: PAF), the African based gold explorationcompany, announces that, together with its Joint Venture ("JV") partnerInternational Mining Investments ("IMI"), it has been granted three exclusiveexploration licences in the Central African Republic ("CAR"). The newlyacquired licences - at Bozoro, Daya and Boufoyo - cover an area of approximately3,000km(2) in the northern part of the Dekoa greenstone belt. Highlights • Three exclusive exploration licenses covering an area of 3,000km(2) are granted to Pan African and its JV partner in the CAR • Pan African acquires a 55% controlling stake in the CAR JV Pan African has acquired an additional 10% interest in the JV from Goldiam SARLfor £112,000 satisfied by a cash consideration of £53,000 and the issue of1,072,727 ordinary shares at a value of 5.5p per share (total value of £59,000).This interest will be held in a local special purpose vehicle in the CAR. Pan African will also pay Goldiam US$2 per reserve ounce upon successfulcompletion of a bankable feasibility study ("BFS") on any and all of the goldexploration projects in the CAR discovered as part of the original Joint VentureAgreement. Pan African has acquired the interest as a free carry, together with Goldiam'svote in managing the JV, effectively giving it management control over all thegold projects for which the JV holds title in the CAR. Because the additionalshareholding is a free carry, Pan African and its remaining partner, IMI, willcontinue to equally fund the JV. Goldiam, as Pan African's local partner,provides in-country services at cost. As part of the deal Pan African has also acquired Goldiam's option to purchasean additional 20% of any gold project developed as part of the JV. The cost ofthis option will be based on 20% of the net present value of the projectdetermined by the BFS. A discount of 25% will then be applied to that value. Jan Nelson, CEO of Pan African, said: "Our gold exploration activity andstrategy in the CAR is now a regional play in a country where the prospectivityis as significant as Tanzania's was in the early 1990's. The three newexploration licenses in the Dekoa greenstone belt, together with our Bogoinexploration licence, gives us approximately 4,000km(2) of greenstone belt thatis highly prospective for large-scale gold mineralisation. Furthermore, we nowhave effective management control of the JV and the exploration activities,whilst our JV partner still contributes equally to the expenditure. We considerthis a good deal for the Company and our shareholders." - ENDS - Enquiries: Pan African Resources Ambrian Partners Parkgreen CommunicationsJan Nelson, CEO Richard Brown Justine Howarth / Victoria Thomas+27 11 886 1211 +44 (0) 207 776 6400 +44 (0)20 7493 3713+27 (0) 82 494 5628Colin Bird+44 (0)20 7584 2155 This information is provided by RNS The company news service from the London Stock Exchange