[miningmx.com] — PAN African Resources (Pan African) nearly doubled its
attributable profit to ₤14.4m (previous interim profit – ₤7.6m) in the six months to
end-December, and trebled its cash-on-hand since then to ₤16m as of February 17.
Reporting these results to investors in Johannesburg on Wednesday, CEO Jan Nelson said Pan African would remain focused on its
operations in South Africa for the medium-term as it bedded down a number of new
projects and acquisitions.
“We like being in South Africa, which we think is still the best country in Africa in
which to develop a mining project,’ Nelson said.
London and JSE-listed Pan African was originally set up to develop gold projects in
various African countries, with its main exploration programmes focused on the
Central African Republic (CAR), Ghana and Mozambique.
The company listed on the JSE in 2007 when it bought control of Barberton Gold
Mines (Barberton) from the former Metorex.
Since then, Pan African has turned Barberton around and diversified into platinum
group metals (PGM) through the Phoenix tailings treatment project.
It shut down its African exploration programme in 2009 and disposed of all these
ventures, except the Manica gold project in Mozambique which it is about to spin out
as a separate listing on the ASX in April.
The next projects are to double the capacity of the Phoenix plant and to build a gold
tailings retreatment facility at Barberton, which will add 25,000 oz of gold to the
mine’s current annual production of 95,000 oz.
Nelson rejected criticism by some analysts of Pan African’s latest deal in January
through which the company teamed up with Wits Gold to buy Evander Gold Mines
(Evander) from Harmony for R1.7bn in total.
“We like high-grade ore bodies, and the grade at Evander compares very favourably
with Barberton,’ he said.
“I’ve heard comments that mining operations at Evander are “high-grading’ the ore
body, but they are not, because it is all high-grade ore.
“I have put the mine plans up on the wall here, and if anyone can find a low-grade
patch of ore for me on those plans then I will buy you a case of whisky,’ Nelson
said.
“We did not buy Evander for the 34m oz of gold resource it owns. We bought it for
the 8m oz of reserves, most of which is at a grade of 8g/t. That’s a high-grade ore
body and I don’t know where else in the world you can find an ore body like
that.’
Turning to Manica, Nelson said Pan African intended initially selling down its stake to
between 35% and 40%.
“Manica will have its own management team. We want to let them do what they
need to do and we don’t want to be heavy-handed in terms of running the company.
“It will probably take us about three years to realise full value from the disposal of
Manica.’
– The writer owns shares in Pan African.
