Pan African Resources has struck a “conditional agreement” to buy the surface dumps at Peter Skeat’s Blyvoor Gold operation for R110m so putting the final kibosh on Katoro Gold’s attempts to buy the dumps and list them on the London Stock Exchange.
According to Pan African CEO Cobus Loots, “Pan African is pleased to have secured the right to the Blyvoor tailings which is one of the last remaining large-scale gold tailings resources available in South Africa.
“We look forward to progressing our studies on this opportunity in the year ahead and we are hopeful that we can ultimately demonstrate a compelling project.”
Terms of the agreement are that Pan African has a three-month period starting in January to conduct a “fatal flaw due diligence” on the tailings dumps which are estimated to contain a total mineral resource of more than 1.4moz of gold.
Then Pan African has a further nine months – to December 2022 – to complete a definitive feasibility study after which “at its sole discretion and subject to fulfilment of suspensive conditions customary for a transaction of this nature’ it will pay R110m in cash for the dumps.
A technical pre-feasibility study indicates the potential to produce 25,000oz to 30,000oz of gold through processing 6mt of tailings annually over a mine life of 15 years which is extendable to 25 years if the inferred mineral resources are included.
Pan African has extensive experience in running gold retreatment projects from its existing dump operations at the Barberton Tailings Retreatment Plant as well as its Evander Tailings Retreatment Plant and Elikhulu operation.
In November 2020 Pan African acquired the Mogale and Soweto Cluster dump projects from Mintails on which it is currently finalising a definitive feasibility study.
Loots told Miningmx “we are really excited about this deal. Where else in the world can you get a gold resource like this on surface for just R110m?”
The dumps belong to Peter Skeat who bought the former Blyvooruitzicht mine after it was put into provisional liquidation in 2013. He intended to develop two projects – one to retreat the surface dumps and one to re-open the underground mine – but subsequently decided to sell the dumps.
He had previously granted two, six month options to purchase the dumps to Jan Brits of Target Mine Consulting who teamed up with Katoro Gold but these options lapsed after Brits repeatedly failed to come up with the funds according to Skeat who said he was now negotiating with other potential buyers.
Despite this, Katoro told the London Stock Exchange in October it intended listing the dumps as a separate company on the exchange subject to various conditions one of which was Target furnishing proof it had bought dumps from Skeat for R140m.
Skeat vehemently denied that the dumps had been sold to Brits/Target but Katoro persisted with the potential transaction until December 6 when it said Brits had not provided proof of ownership of the dumps and that it “was considering its position and options in this matter.”