Pan African Resources gets its ducks in a row at Evander

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The Elikhulu tailings retreatment project is the current focus of attention at Pan African Resources’ Evander Mine but crucial for the mine’s medium-term future is exploration work on the “2010 pay shoot” where the first deep-level borehole is being drilled.

Management is assessing whether follow-up exploration on the pay shoot should be carried out through additional boreholes from surface – at a cost of around R6m each – or if a development end should be driven into the pay shoot area from an existing tunnel sitting about 50m away. That development end would intersect the reef and then further exploration drilling into the shoot could be carried out from underground.

Pan African has just raised R705m through a share placement to help fund the R1.65bn Elikhulu tailings project with the balance being funded through a R1bn loan agreement with Rand Merchant Bank. Elikhulu is forecast to produce some 50,000oz of gold annually after completion which is expected in the first quarter of the 2018 calendar year. It is the latest in a series of surface tailings treatment plants built by Pan African.

But it’s the preliminary work on the “2010 pay shoot” – so named from the time when Evander was owned by Harmony because this was one of the potential projects it identified that could be brought into production by 2010 – that has focused the longer-term interest of some investors.

According to one authoritative source, “ the 2010 pay shoot was one of the key future growth projects identified when Pan African took the decision to buy Evander from Harmony. Subsequently, Pan African management seemed to lose interest in that project and allowed the mine workings near it to flood.

“It’s encouraging that the company’s technical staff is now focusing on that project once more because that pay shoot is potentially large and high grade. It’s an extension of the pay shoot mined from the No 7 shaft area.”

Group mining engineer Bert van den Berg – who has recently joined Pan African from Lonmin – commented a recent independent geological study at Evander had ranked the 2010 pay shoot as the top project to be tackled next at the mine.

He added, “We basically knew that already. The area is closer to our existing infrastructure than where we are currently mining although it is flooded at present. The 2010 pay shoot will also be growth for Evander because it will be an add-on to what we are already mining. We do not need an additional shaft to exploit it. The main costs will be to pump out the water and refurbish the workings.”

Van den Berg said the current plan was to drill another six holes from surface to prove up the reserve but commented, “ we are assessing the cost of putting a development end into the pay shoot. Being a miner, if two of these surface holes hit good grade I will start pushing to get in underground but obviously the guys with the money will decide what sort of risk they are willing to take.”

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