PAN African Resources has overhauled its capital expenditure plans following positive concept study results into Mintails, a large gold tailings deposit situated west of Johannesburg.
The gold producer said in an announcement today that Mintails could produce an estimated 533,000 ounces of gold over 12 years at an all-in sustaining cost of about $800/oz. The company would progress the project to a prefeasibility study in the third quarter of this year and a definitive study in the first quarter of 2022.
As for Pan African’s Egoli project, the company said it would reshuffle its capital expenditure plans so that it lessened the upfront requirement and reduce the long-term debt burden on the project which was being negotiated with Rand Merchant Bank.
Pan African said last year that it would spend R1.2bn on the Egoli project – an expansion of its Evander Gold Mines in Mpumalanga province. The project could run as deep at 1.8km, producing 72,000 oz of gold some 20 months after construction begins.
“We have re-evaluated our capital expenditure priorities following the receipt of the positive Mintails concept study … resulting in a more phased approach for the development of the Egoli project,” said Cobus Loots, CEO of Pan African.
Loots added that this would also extend the life of its 8 shaft pillar mining at Evander which was expected to yield 80,000 oz of gold over the remaining two years of life left.
Pan African had also run a study regarding mining gold from a deeper level accessible through 8 shaft, known as the Evander’s 24 Level project study. This was found to have 100,000 oz of potential gold production over a two-and-a-half year period.
The overall outcome is that Pan African has an array of gold replacement and growth options. The company expects to produce 195,000 oz of gold for the financial year ended June, an upgrade on the previous guidance of 190,000 oz. This was owing to an improvement in the performance of 8 shaft at Evander.
“The Evander 8 Shaft pillar project is now performing in line with our expectations, and generating the anticipated returns on this capital investment,” said Loots.
The company said it expected to produce a similar level of gold in its 2022 financial year.