| Fri 19 Feb 2010, 16:00 | | PAN - Pan African Enters Into Exclusivity Agreement And Agrees To Terms For |
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PAN
PAN
PAN - Pan African Enters Into Exclusivity Agreement And Agrees To Terms For
The Establishment Of The Phoenix Plant Site And Withdrawal Of Cautionary
Announcement
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` or the `company`)
PAN AFRICAN ENTERS INTO EXCLUSIVITY AGREEMENT AND AGREES TO TERMS FOR THE
ESTABLISHMENT OF THE PHOENIX PLANT SITE AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT
Pan African is pleased to announce the conclusion of an interim Exclusivity
and Agreed Terms Agreement (the `Agreement`) between itself, its wholly-owned
subsidiary Phoenix Platinum Mining (Pty) Ltd (`Phoenix`) and International
Ferro Metals SA (Pty) Ltd (`IFM`) (collectively the `Parties`). The Agreement
relates to the siting and construction of the Phoenix Chrome Tailings
Retreatment Plant (`CTRP`) on the IFM Mine Property ("IFM Property") as well
as the potential acquisition of the 25% Net Profit Interest ("NPI") held by
IFM in respect of the Platinum Group Metals contained in the IFM Lesedi
operations tailings fraction treated through the CTRP. The effective date of
the Agreement was 18 February 2010.
The Agreement allows the Parties to negotiate exclusively for a 12 month
period ("Exclusivity Period") to finalise the exact CTRP site location on the
IFM Property, and also to resolve technical issues relating to the required
services and associated facilities and utilities. The Exclusivity Period may
be extended by a further six months by mutual agreement. The Agreement also
stipulates the terms under which Phoenix may acquire IFM`s 25% NPI and fixes
the total consideration for the CTRP site location and acquisition of the NPI
at ZAR80 million (approximately GBP6.8 million), payable in cash. A non-
refundable exclusivity fee of ZAR2 million cash (approximately GBP170,000) was
paid by Phoenix to IFM on the effective date.
Jan Nelson, Chief Executive Officer of Pan African, commented: "The signature
of this agreement marks a significant milestone in advancing our Phoenix
project to production. Final plant design engineering work is expected to be
completed within four months after the conclusion of a formal CTRP and NPI
agreement, whereupon the CTRP construction will commence. We expect that the
CTRP should be commissioned within 12 months from commencement of earthworks,
which means that H1 of 2012 is a realistic production start-up date."
Withdrawal of cautionary announcement
Shareholders are referred to the cautionary announcement first released on 26
November 2010 and subsequently renewed on 7 January 2010 and 10 February 2010,
and in terms of the listings requirements of JSE Limited are advised that, as
the possible transaction referred to therein has now been announced, caution
is no longer required to be exercised when dealing in the Company`s
securities.
For further information on Pan African Resources and a presentation providing
more detail on the Phoenix acquisition, please visit the website at
www.panafricanresources.com
Rosebank
19 February 2010
JSE Sponsor
MACQUARIE FIRST SOUTH ADVISERS (PTY) LIMITED
For further information on Pan African, please visit the website at
www.panafricanresources.com
ENQUIRIES
Pan African Resources
Jan Nelson (CEO) +27 (0) 11 243 2900
Nicole Spruijt (Public Relations) +27 (0) 11 243 2900
RBC Capital Markets
Martin Eales +44 (0) 20 7029 7881
Macquarie First South Advisers
Melanie de Nysschen/Thembeka Mgoduso +27 (0) 11 583 2000
St James`s Corporate Services Limited
Phil Dexter +44 (0) 20 7499 3916
Werksmans Incorporating Jan S de Villiers
Huneiza Goolam +27 (0) 11 535 8000
Date: 19/02/2010 16:00:11 Produced by the JSE SENS Department.
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