[miningmx] — PAN African Resources finally sold its Mozambican gold project, Manica, in a cash and shares transaction potentially worth R52.5m, the company said on Wednesday.
Pan African first announced its intention to dispose of Manica in 2011.
The buyer is Auroch Minerals Mozambique, a subsidiary of ASX-listed Terranova Minerals, which would pay Pan African an initial R17.5m in cash and 25 million company shares. Pan African would be entitled to further tranches of cash and shares payments over the next four years on the achievement of certain project milestones by Auroch.
“Pan African expects to utilise the cash portion received for the funding of the construction and development of its Bramber Tailings Retreatment Project and expects to retain the Terranova Shares received … so as to continue to participate in the development of Manica,’ the company said in a statement.
Terranova is a mineral exploration company which has gold projects in Western Australia, although going forward Terranova’s primary focus would be on Manica.
The Manica project, which spans 42km2, is positioned in Mozambique’s Beira Corridor and has a JORC resource of some 3 Moz at 1.83g/t Au. The area surrounding Manica is well known for hosting gold mines such as Penhalonga, Rezende, Monarch and Old West. The reefs in these mines have typically been classified as porphyry mineralisation within quartz-diorites where gold is hosted in quartz veins.
“The disposal of Manica allows us to remain focused on our strategy of the development and growth of our South African based operating assets,’ said Pan African CEO Jan Nelson. ” Although we are no longer intent on developing exploration projects, we believe that this project and the Auroch executive team have the potential to develop the project into a significant gold producer.’