| Wed 1 Feb 2012, 13:11 | | PAN - Pan African Resources plc - Approval granted for Phase One of the |
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PAN
PAN
PAN - Pan African Resources plc - Approval granted for Phase One of the
Barberton Tailings Retreatment Project and the acquisition of Harper
Tailings Operations
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`)
Approval granted for Phase One of the Barberton Tailings Retreatment Project
and the acquisition of Harper Tailings Operations
Pan African is pleased to announce that the board of directors has approved
Phase One of the Barberton Tailings Retreatment Project ("BTRP") which will
recover gold from the retreatment of the gold tailings situated close to the
Barberton Gold Mining Operations ("Barberton"). It is anticipated that the
BTRP will increase the production profile at Barberton from 95,000oz to
120,000oz per annum.
Highlights
- The BTRP comprises a total resource of
654koz (13.7Mt @ 1.38g/t) and a
reserve of
248koz (13.7Mt @ 0.56g/t)
- A Capital Cost Estimate ("Capex") of GBP27 million (ZAR325 million) has
been approved for Phase One of the BTRP in order to retreat 1.2Mt per annum
of gold tailings over a six year life, funded from internal cash flows
- Over the life of Phase One of the project, a total of 160koz will be
recovered (which includes 120koz from tailings and another 40koz from
current underground arisings to be retreated)
- At a gold price of ZAR400,000 per kilogram the project has a net present
value ("NPV") of GBP27 million (ZAR325 million)
- Phase One of the BTRP:
- will increase current production at Barberton by 26% to 120koz
per annum
- is expected to produce gold at an operating cash cost of
ZAR194,000 per kilogram
- Commissioning of Phase One of the BTRP is expected to commence in April
2013 with full production being achieved during August 2013 (build -up
phase)
- The remaining 129koz* of reserve will represent Phase Two of the project
and the phasing of this additional production is currently being finalised,
which would extend the BTRP from 6 to 12 years
- Harper Tailings Operations acquired for a total consideration of
GBP830,000 (ZAR10 million)
*The 40koz resulting from the retreatment of current underground arisings
after gold reclaimed from the BTRP is not included in the BTRP reserve of
248koz.
Jan Nelson, Chief Executive Officer of Pan African commented: "This project
will be a further example of the tried and tested approach applied at the
Phoenix platinum group metals tailings retreatment project to enhance the
production profile at Barberton. The operating cash cost profile from
underground production at Barberton is currently below ZAR165,000 per
kilogram and this project will further increase the margins resulting in
increased cash flow. This should ensure that Pan African can increase its
dividend as well as pursue other accretive growth opportunities in the near
term."
Project Concept & Locality
During 2010 the main tailings storage facility (referred to as the Bramber
tailings storage facility (`BTSF`) at the Fairview section of Barberton
reached the end of its operational life. The BTSF was commissioned in 1987
and has been the main storage facility for gold tailings from the Fairview
section of Barberton. In light of current gold prices and the volume of
material the BTSF represents, the Company decided to investigate the
financial viability of reclaiming recoverable gold from the BTSF.
The exploration programme to investigate the volume and grade of the BTSF
comprised a comprehensive auger drilling campaign on a 20 metre by 20 metre
grid which included 308 boreholes for a total of 6,074 metres.
Modelling and geological profiling of the boreholes confirmed two distinct
geographical populations across the BTSF. This is the result of historical
deposition that took place in two separate compartments, a higher grade
BIOXRegistered tail section and a lower grade concentrator/flotation tail
section. Geostatistical modelling indicates 74,600oz (758kt @ 3.06g/t in
situ) for the BIOXRegistered section and 72,900oz (2.369Mt @ 0.96g/t in
situ) for the concentrator/flotation section. This represents a total
resource of 147,500oz (3.130Mt @ 1.47g/t in situ) of which 24% by volume
(51% by gold content) of the total Mineral Resource, originated from the
BIOXRegistered process. The flotation process produced the balance.
A total of 10 composite samples representative of the tailings material were
submitted for metallurgical recovery test work. Initial excess cyanide test
work indicated recoveries varying between 45% and 55%. Further Kinetic test
work confirmed recoveries of 52%.
The two adjacent Tailings Storage Facilities ("TSFs"), Harper North and
Harper South, both older than the BTSF and also originating from the
Fairview Mining operation, were subsequently investigated as an additional
surface source that could be reclaimed for gold. After successful test work
the dumps were purchased from Michael Harper on 15 December 2011 for an
aggregate consideration of ZAR10 million (GBP830,000). A total of 52 auger
holes were drilled (1,013.5m drilling) and 753 samples taken (composited at
3 metre intervals to produce 463 samples). A total of five composites,
representing the dumps, were submitted for metallurgical test work. These
resources are included in the resource statement, as tabled below, and were
also converted to reserve after stringent metallurgical test work was
performed on the material. The Bramber TSF, Harper South TSF and Harper
North TSF were included in the BTRP Phase One business case study.
Furthermore, the Company has completed auger drilling on another 6.8Mt of
tailings at the New Consort section of Barberton, which has defined a
further 4Mt of reserves (129koz) which would extend the BTRP from
approximately 6 to 12 years, comprising Phase Two of the project. The auger
holes drilled totalled 48 and equates to 790 metres. A total of 615 samples
were taken at 1.5 metre increments that was composited at 3 metre intervals,
for a total of 405 combined samples submitted for gold content
determination. A total of five composites were submitted for metallurgical
test work. Phase Two of the BTRP project is estimated to require a further
ZAR55 million (GBP4.6 million). in capital and the phasing of production
from this phase is being finalised.
Total Bramber Tailings Dam Resource and Reserve Statement as at 1 June 2011
Project Resource Mass Grade Mineral Recovery Reserve Mineral
Category (kt) (g/t) Resource Category Reserves
(kt) (g/t) (kg) (koz) (kg) (koz)
Bramber Measured 3,130 1.47 4,600 148 51.2% Probable 2,355 76
Tailing Indicated
Dam Inferred
Total 3,130 1.47 4,600 148 51.2% Total 2,355 76
Harper North 2,693 1.16 3,124 100 21.0% Probable 656 21
North South 1,083 1.65 1,787 57 39.7% Probable 709 23
and
South
Total 3,776 1.30 4,911 158 1,365 44
est.
Segalla/ Calcine 290 5.95 1,726 55 18.2% Probable 314 10
Consort Non - 6,591 1.38 9,096 292 40.9% Probable 3,684 118
calcine
Total 6,881 1.57 10,821 348 3,998 129
est.
Total Surface 13,787 1.47 20,332 654 7,718 248
Tailings
Project Development Summary
The BTRP plant site will be located on the Barberton property and the
planned BTSF extension will be positioned adjacent to the current tailings
dam on the Farms Bramber South 349JU and Bramber Central 348JU which are
owned by Barberton.
The BTRP has been designed to treat 100,000 tons tailings per month through
a Carbon in Leach circuit using electro-winning and smelting to produce a
saleable product. Current tailings from the Fairview Concentrator and the
Fairview BIOX(R) plant totalling 14,000 tons per month will be routed via a
pipeline to the BTRP for treatment and 86,000 tons per month will be
reclaimed from the BTSF.
In October 2011, Basil Read-Matomo, which successfully constructed Pan
African Phoenix Chrome Tailings Retreatment Plant within budget and two
months ahead of schedule, completed the BTRP Feasibility Report and Capex.
The total Capex for the BTRP is estimated to be GBP27 million (ZAR325
million) of which GBP10 million (ZAR830,000) will be used to extend the
current TSF used at the Fairview operation for tailings disposal over the
Life of project.
Basil Read-Matomo has been contracted to design, procure and construct the
BTRP. Long lead items that have been identified such as leach tanks and
carbon regeneration kiln and are currently being procured. Civil work of the
BTRP is planned to commence end March 2012 with mechanical construction
commencing in June 2012, and commissioning commencing in March 2013, with
full production being achieved during August 2013 (build-up phase). The
electric power requirement of 4,522kW to the BTRP will be supplied via an
overhead 11kV line from the South African electricity utility, Eskom.
At a gold price of ZAR400,000 per kilogram Phase One of the project
indicates an NPV of GBP27 million, at a total cash cost of ZAR194,000 per
kilogram (ZAR114 per ton) over the life of the project. Capex is estimated
at GBP27 million (ZAR325 million) and a total of 160, 000oz of gold will be
produced at an average recovered grade of 0,54g/t. This would increase the
annual production profile at Barberton by approximately 20,000 oz per annum.
1 February 2012
Johannesburg
JSE Sponsor
Macquarie First South Capital (Pty) Limited
For further information on Pan African Resources plc, please visit the
website at www.panafricanresources.com
Enquiries
South Africa UK
Pan African Resources RBC Capital Markets
Jan Nelson, Chief Executive Officer Martin Eales / Peter Barrett-Lennard
+27 (0) 11 243 2900 +44 (0) 20 7653 4000
Macquarie First South Capital (Pty) St James`s Corporate Services
Limited Limited
Melanie de Nysschen / Annerie Britz Phil Dexter
/ +44 (0) 20 7499 3916
Yvette Labuschagne
+27 (0) 11 583 2000
Vestor Investor Relations Gable Communications
Louise Brugman Justine James
+27 (0) 11 787 3015 +44 (0) 20 7193 7463
+44(0) 7525 324431
Notes
The resource statement has been compiled in accordance with the South
African Code for Reporting of Exploration Results, Mineral Resources and
Mineral Reserves ("SAMREC"). The verification and validation of the data
and the information contained in this announcement was managed by Mr David
Briggs (NHD Pr.Sci.Nat), Director: Geologix MRC (Pty) Limited, who is
accredited with the South African Council for Natural Scientific Professions
("SACNASP"). He has consented to the inclusion of the technical information
in this announcement in the form and context in which it appears.
The services of the following independent consultants and experts were
secured to assist and support this process:
- Sampling and Drilling: Gold Mine Sand and Slime Dams Drillers CC
- Assaying, mineralogy and metallurgical test work: SGS Lakefield Resources
Africa (Pty) Limited.
- Geological modelling and data conversion for the resources: Geologix MRC
(Pty) Limited, a South African Resources and Geological Consultancy. Mr
Briggs is accredited with the South African Council for Natural Scientific
Professions (SACNASP).
- ENC Minerals: Eugene Nel is a Professional Engineering technologist
registered with the Engineering Council of South Africa (ECSA).
Date: 01/02/2012 13:11:01 Produced by the JSE SENS Department.
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