| Thu 8 Apr 2010, 12:00 | | PAN - Pan African Resources Plc - Operational update |
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PAN
PAN
PAN - Pan African Resources Plc - Operational update
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`)
OPERATIONAL UPDATE
1 INTRODUCTION
Pan African is pleased to release an operational update providing
production guidance for the second half of the Company`s financial year
2010 (`2H2010`) and an update on the significant progress that has been
achieved with the Phoenix Platinum Mining (Pty) Limited (`Phoenix
Platinum`) project.
2 BARBERTON MINES
Although the results for the six months ended 31 December 2009 (`1H2010`)
had shown a decrease in gold production, largely due to a security
operation at Barberton Mines (Pty) Limited (`Barberton Mines`) to combat
criminal mining activity, increased gold production is expected in 2H2010.
The Company is pleased to report that the impact of new security measures,
together with a renewed focus on mineral resources management and
productivity initiatives, has resulted in an increase in expected gold
production for 2H2010, and as a result Barberton Mines is now on track to
produce 97,000 ounces of gold (318,000 tons at a head grade of 10.40 g/t)
for the full financial year 2010 at a cash cost of less than ZAR165,000 per
kilogram. The Company continues to focus on reducing the cost of
additional security measures, consumables and electricity usage.
It is with regret that the Company reports a fatality at the Fairview
section of Barberton Mines during 2H2010. As announced in the results for
the six months ended 31 December 2009, Barberton Mines as a whole achieved
1.2 million fatality free shifts at the end of December 2009, and the
Fairview section achieved 2 million fatality free shifts over a six year
period ended 5 February 2010. Pan African is reviewing its Safety, Health,
Environment and Community programme. The results of this review will be
communicated to shareholders at the Company`s financial year-end results
presentation, expected to be scheduled for early September 2010.
3 PHOENIX PLATINUM
Shareholders are referred to the announcement released on 19 February 2010
advising that Pan African had entered into an exclusivity agreement with
International Ferro Metals SA (Pty) Limited (`IFM`) (`Exclusivity
Agreement`) relating to:
- the siting and construction of the Phoenix Platinum Chromite Tailings
Retreatment Plant (`CTRP`) on the IFM Mine Property; and
- 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 Exclusivity Agreement provides for Pan African and IFM to conclude a
formal, detailed agreement relating to the CTRP and NPI elements during the
period of the exclusivity (`Formal Agreement`), and fixes the total
consideration for the CTRP site location and acquisition of the NPI at
ZAR80 million (approximately GBP7.1 million), payable in cash
(`Consideration`).
The Consideration is payable in tranches as follows:
- On conclusion of the Formal Agreement: ZAR25 million
(approximately GBP2.2 million);
- On commencement of the CTRP construction: ZAR25 million
(approximately GBP2.2 million);
- On commissioning of the CTRP: ZAR30 million
(approximately GBP2.7 million).
Pan African is pleased to report that the site for the CTRP was agreed with
IFM on 31 March 2010. The Company is now finalising specific detail
relating to the infrastructure and services requirements prior to the
commencement of the construction of the CTRP. This process is expected to
be completed by the end of April 2010, after which detailed engineering
design will be undertaken. The parties will thereafter conclude the Formal
Agreement, at which time the first tranche of ZAR25 million (approximately
GBP2.2 million) will become payable.
CTRP construction is anticipated to commence during June 2010 and first
production is expected in the second half calendar year 2011.
The successful completion of the stages detailed above will result in Pan
African producing approximately 15,000 ounces per annum of four Platinum
Group Elements (Platinum (56.5%), Palladium (27%), Rhodium (16%) and Gold
(0.5%). The expected life of the project is 17 years.
For further information on Pan African Resources plc, please visit the
website at www.panafricanresources.com
Rosebank
8 April 2010
JSE Sponsor
MACQUARIE FIRST SOUTH ADVISERS (PTY) LIMITED
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
Date: 08/04/2010 12:00:04 Produced by the JSE SENS Department.
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