[miningmx.com] – PAN African Resources (Panaf) said it would produce 50,000 ounces of gold from its Elikhulu surface gold project which is currently subject to a definitive feasibility study. If approved, production from Elikhulu would lift group output a quarter.
Announcing interim results, in which headline share earnings more than doubled to R12.43 per share, Panaf CEO, Cobus Loots, said that in addition to fulfilling its promise to return cash to shareholders, Panaf would actively seek organic and acquisitive growth.
“With strong cash flows and improved funding capacity of up to R1.1bn, the group is well positioned to take advantage of such growth opportunities,” he said. Panaf reduced net debt to R345.8m from R458.6m in the interim period ended December 31.
Loots said Elikhulu could potentially treat slimes at a processing capacity of up to 12 million tonnes a year and at a headgrade of 0.28g/t from the Winkelhaak, Leslie and Kinross tailings storage facilities in Mpumalanga province.
The project is estimated to yield 50,000 oz of gold a year in its first eight years while treating the Kinross and Leslie tailings storage facility. After that output of 38,000 oz would be achieved by processing the Winkelhaak tailings storage facility.
Based on first half production of just over 100,000 oz from its Barberton and Evander operations, Panaf believes it will achieve 200,000 oz for the 2016 financial year. Some 8,000 oz in platinum group metals would be retrieved for the year from its Evander Mines Tailing Retreatment Plant (ETRP).
Focus is likely to fall on the capital cost of Elikhulu, however. Loots told BDLive in July that the R1.8bn price tag on the project must be brought down to R1bn or R1.1bn.
Panaf also said it was progressing an “economic assessment” of the Evander South Project. “The project team is assessing the capital costs associated with the various mine designs that would provide the most efficient and cost effective manner of accessing the ore-body,” the company said.
