Pan African Resources PLC
(Incorporated and registered in England and Wales under Companies Act 1985 with registered
number 3937466 on 25 February
2000)
Share code on AIM: PAF
Share code on JSE: PAN
ISIN: GB0004300496
(“Pan African Resources” or the “Company” or the “Group”)
2017 Abridged Mineral Resource &
Mineral Reserve Report
Pan African Resources, the African focused precious metals
producer, is pleased to announce that the 2017 Abridged Mineral
Resource and Mineral Reserve Report (“MR&MR”) has been
published and is available on the Company's website at
www.panafricanresources.com. A summary of the MR&MR, including
the Group Mineral Resource and Mineral Reserve statement as at
30 June 2017, has been provided
below.
Overview
- 1.2 million ounces (“Moz”) or 12.0% gross annual increase in
Group gold reserves to 11.2Moz (2016: 10.0Moz).
- 0.5Moz or 1.4% gross annual decrease in Group gold resources to
34.4Moz (2016: 34.9Moz).
- No material change in Group platinum group elements (“PGE”)
resource, 0.6Moz (2016: 0.6Moz).
- No material change in Group PGE reserve, 0.2Moz (2016:
0.2Moz).
- Disposal of Uitkomst Colliery Proprietary Limited to Coal of
Africa Limited on 30 June 2017. No
Group coal resources and reserves stated.
- Following positive mineral resource (2.0Moz) to mineral reserve
(1.7Moz) conversion and the definitive feasibility results of the
Evander Gold Mining Proprietary Limited (“Evander Mines”) tailings
storage facilities re-mining projects (“Elikhulu Project”), the
Company has mandated DRA Projects SA Proprietary Limited (“DRA
Projects”) to commence construction of the project. The life of
mine (“LOM”) for Elikhulu Project is stated at 14 years, yielding
approximately 56 000oz a year for the initial 8 years of
production and then approximately 45 000oz per annum for the
remaining 6 years.
- Focused mineral reserve conversion at Barberton Mines
Proprietary Limited (“Barberton Mines”) through the development of
the sub-vertical shaft project at its Fairview operation,
thereby increasing overall capacity and production from the
main reef complex (“MRC”) section by 7 000 – 10 000oz per
annum and sustaining the LOM at Barberton Mines to 20 years.
- Surface exploration drilling progressed well at Evander Mines
targeting the 2010 Pay Channel. A feasibility study on
exploiting the surrounding pillars at Evander Mines’ No 7 Shaft and
the 2010 Pay Channel resources is expected to be completed during
the first quarter of the 2018 financial year. Evander Mines and the
current Evander Tailings Retreatment Plant (“ETRP”) LOM stated at
15 years.
- SRK Consulting (Pty) Ltd has independently reviewed the Mineral
Resources and Mineral Reserves of the Pan African Resources’ gold
assets as at 30 June 2017 and signed
off on the declared estimates.
Gold
Group Gold Mineral Resources
The Group’s attributable gold Mineral Resources decreased from
34.9Moz at 30 June 2016 to 34.4Moz
at
30 June 2017, equating to an annual
decrease of 0.5Moz, or 1.4%.
|
|
|
Contained
gold |
As at 30 June 2017 |
Category |
Tonnes
million |
Grade
g/t |
Tonnes |
Moz |
Mineral Resources |
Measured |
5.3 |
10.94 |
57.6 |
1.9 |
|
Indicated |
262.2 |
2.43 |
636.2 |
20.4 |
|
Inferred |
70.4 |
5.35 |
376.5 |
12.1 |
Pan African Resources |
Total |
337.9 |
3.17 |
1 070. 3 |
34.4 |
Group Gold Mineral Reserves
The Group’s attributable Mineral Reserves increased from 10.0Moz
at 30 June 2016 to 11.2Moz at
30 June 2017, equating to an annual
increase of 1.2Moz, or 12.0%.
|
|
|
Contained
gold |
As at 30 June 2017 |
Category |
Tonnes
million |
Grade
g/t |
Tonnes |
Moz |
Mineral Reserves |
Proved |
4.1 |
7.19 |
29.8 |
1.0 |
|
Probable |
227.7 |
1.40 |
317.9 |
10.2 |
Pan African Reserves |
Total |
231.8 |
1.50 |
347.7 |
11.2 |
The increase can primarily be attributed to the conversion of
the Elikhulu Project Mineral Resources to Mineral Reserves.
Platinum Group Elements
Group PGE Mineral Resources
The Group’s attributable PGE Mineral Resources did not change
materially for the year under review.
|
|
|
Contained
PGEs 4E |
As at 30 June 2017 |
Category |
Tonnes
million |
Grade
g/t |
Tonnes |
Moz |
Mineral Resources |
Measured |
|
|
|
|
|
Indicated |
2.3 |
2.32 |
5.4 |
0.2 |
|
Inferred |
3.4 |
3.67 |
12.5 |
0.4 |
Pan African Resources |
Total |
5.7 |
3.12 |
17.9 |
0.6 |
Group PGE Mineral Reserves
The Group’s attributable PGE Mineral Reserves did not change
materially for the year under review.
|
|
|
Contained
PGEs 4E |
As at 30 June 2017 |
Category |
Tonnes
million |
Grade
g/t |
Tonnes |
Moz |
Mineral Reserves |
Proved |
|
|
|
|
|
Probable |
2.3 |
2.32 |
5.4 |
0.2 |
Pan African Reserves |
Total |
2.3 |
2.32 |
5.4 |
0.2 |
Group organic growth
Current exploration drilling as well as activities to access and
develop our orebodies was maintained during the financial year. The
strategy of converting Mineral Resource to Mineral Reserve was
progressed by moving organic projects further up the mining value
chain towards feasibility or production. The tables below reflect
the progress of near-mine growth projects that have contributed
ounces to the Mineral Resource for the year.
Group: Exploring the orebody -
exploration drilling
Operation |
Total
metres |
Number
of
boreholes |
Average
channel
width
cm |
Number
of
intersections
above
cut-off |
Average
grade
g/t |
Total
expenditure
R’million |
Barberton Mines |
8,793 |
106 |
136 |
34 |
17 |
4.7 |
Evander Mines |
783 |
14 |
31 |
6 |
28 |
1.4 |
Group: Accessing the orebody -
on-reef development
Operation |
Total
on-reef
development
metres |
Average
grade
g/t |
Barberton Mines |
2,533 |
6.20 |
Evander Mines |
245 |
28.86 |
Barberton Mines: Developing the
orebody - capital ore reserve projects
Project |
2017
metres |
2016
metres |
2015
metres |
Potential
resource
target
oz |
Sheba – pillar development |
450 |
540 |
824 |
10,101 |
Sheba – Edwin Bray to Thomas and
Joe’s Luck area |
8 |
27 |
5 |
18,701 |
Fairview – 11 Level Royal Reef |
– |
Equipping |
Equipping |
826 |
Fairview – 1# one reserve
opening |
71 |
131 |
84 |
13,958 |
Fairview – No 3 Shaft deepening |
171 |
64 |
26 |
22,943 |
Fairview – (64 – 68) Level |
451 |
581 |
447 |
851,562 |
New Consort – (33 – 45) PC |
265 |
387 |
258 |
10,000 |
New Consort – MMR pillar
development |
8 |
– |
– |
66,309 |
New Consort – No 3 Shaft |
– |
17 |
327 |
5,969 |
Royal Sheba |
143 |
189 |
165 |
309,180 |
Sheba Western Cross |
4 |
133 |
295 |
25,143 |
Evander Mines: Developing the orebody
- capital ore reserve projects
Project |
2017
metres |
2016
metres |
2015
metres |
Potential
resource
target
oz |
No 2 Decline 24 – 25 Level |
73 |
356 |
904 |
1,200,000 |
25 A block ventilation |
222 |
87 |
10 |
Group growth projects
Elikhulu Project
The Elikhulu Project entails establishing facilities and
infrastructure at Evander Mines, owned and operated by Pan African
Resources, to retreat gold plant tailings at a rate of 1-million
tonnes per month. This is in addition to the existing production
from the ETRP, which will continue to operate independently of the
Elikhulu Project for the next 15 years. Three existing tailings
storage facilities will be reclaimed, in the following order:
Kinross, Leslie and Winkelhaak. The 3 tailing facilities will, post
their processing, be consolidated into a single enlarged Kinross
facility, thus reducing Evander Mines’ environmental footprint and
associated environmental impact.
The project is expected to yield approximately 56,000oz of gold
per annum for the initial 8 years of production (while treating the
Kinross and Leslie tailings storage facilities), and then
approximately 45,000oz a year for the project’s remaining 6 years
from processing the Winkelhaak tailings storage facility. These
production figures exclude an inferred resource of 244,398 ounces
of gold delineated in the soil material beneath the existing
tailing dumps.
Mineral Resource estimate
Mineral Resource category |
Tailings
storage
facility |
Tonnes
million |
Grade
g/t |
Contained
gold
Moz |
Indicated |
Kinross |
51.03 |
0.31 |
0.51 |
|
Winkelhaak |
72.47 |
0.24 |
0.56 |
|
Leslie |
70.07 |
0.32 |
0.71 |
|
|
193.57 |
0.29 |
1.79 |
Inferred (soil) |
Kinross |
9.23 |
0.33 |
0.10 |
|
Winkelhaak |
8.02 |
0.27 |
0.07 |
|
Leslie |
4.57 |
0.45 |
0.08 |
Total |
|
21.83 |
0.33 |
0.24 |
Total Mineral Resource* |
|
215.40 |
0.29 |
2.03 |
Mineral reserve estimate
Mineral Reserve
category |
Tailings
storage
facility |
Tonnes
million |
Grade
g/t |
Contained
gold
Moz |
Probable |
Kinross |
45.2 |
0.31 |
0.4 |
|
Leslie |
70.1 |
0.32 |
0.7 |
|
Winkelhaak |
70.0 |
0.24 |
0.6 |
Total Mineral Reserve* |
|
185.3 |
0.29 |
1.7 |
|
|
|
|
|
|
* Inclusive of ETRP
The Mineral Reserve estimate is a probable 185.3Mt, comprised of
the Kinross (45.2Mt), Leslie (70.1Mt) and Winkelhaak (70.0Mt)
tailings storage facilities at Evander Mines. The combined 185.3Mt
will provide feed material to the existing ETRP at 200,000 tonnes
per month, and to the new project process plant at a rate of one
million tonnes per month (of which 40,000 tonnes per month will be
from run-of-mine tailings).
The combined Mineral Reserve contains an estimated 1.7Moz, of
which an estimated 688,000oz will be recovered over the life of the
project. This estimate excludes the inferred resource 244,398oz of
gold leached and contained in the soil beneath the existing tailing
dumps, which could potentially increase the project life.
The Mineral Reserve estimate assumes a non-selective mining
method whereby the whole of the mineral deposit is mined in a
predetermined sequence. The mining method allows for 100%
extraction of the targeted mineral deposit. Hydraulic mining has
been selected as the mining method as it is a proven technology,
cost effective and technically and operationally well
understood.
The overall average gold recovery over the life of the project
is forecast at 47.8%. Using modelled recoveries, the gold
dissolution value estimated for Kinross is 51.4%, Leslie 48.3% and
Winkelhaak 53.8%.
The Elikhulu Project is progressing according to plan with
project completion and first gold expected in the last quarter of
the 2018 calendar year.
Barberton Mines sub-vertical shaft
project at Fairview mine
The Fairview mining operation is currently restricted by the
hoisting capacity of its No 3 Decline, which is used to access
workings below 42 Level. This decline is currently used to
transport employees and material, and for rock hoisting. The
11-Block, or MRC, orebody has an average grade of 31.3 g/t and
current LOM of 20 years. With no intervention, future mining at
depth will result in increased travelling distance, reduce employee
face time and cause a lack of capacity to ensure both ore
replacement and exploration development.
Pan African Resources, with the assistance of DRA Projects, has
completed a feasibility study on the construction of a raise-bored,
sub-vertical shaft from Fairviews’ 42 Level to 64 Level, with the
potential of continuing the vertical shaft to 68 Level in future.
This sub-vertical shaft will be used to transport employees and
material to the working areas, which will allow the No 3 Decline to
be used exclusively for rock hoisting, increasing overall capacity
and production from this mining area.
DRA Projects has reviewed the technical and commercial aspects
of the project and the supporting feasibility study has yielded
very positive results. The estimated capital expenditure for the
project, including contingencies, is approximately R105 million, to
be incurred over a 2-year period. The productivity improvements for
Fairview are estimated to yield an additional 7,000oz of gold per
annum, which can be optimised further to more than 10,000oz per
annum.
|
|
|
Contained
gold |
|
Category |
Tonnes
million |
Grade
g/t |
Tonnes |
Moz |
Mineral Resource |
Measured |
1.08 |
10.92 |
11.26 |
0.38 |
|
Indicated |
1.06 |
14.13 |
14.97 |
0.48 |
|
Inferred |
2.68 |
14.90 |
39.93 |
1.28 |
Fairview Mine |
Total |
4.82 |
13.79 |
66.16 |
2.14 |
|
|
|
Contained
gold |
|
Category |
Tonnes
million |
Grade
g/t |
Tonnes |
Moz |
Mineral Reserve |
Proved |
0.51 |
10.05 |
6.68 |
0.21 |
|
Probable |
1.50 |
13.89 |
18.28 |
0.58 |
Fairview Mine |
Total |
2.01 |
12.42 |
24.96 |
0.79 |
Evander mines No 7 Shaft No 3 decline
and 2010 Pay Channel
The 2010 Pay Channel resource is adjacent to the No 7 Shaft
infrastructure and extends from the boundary of Taung Gold
International Limited’s No 6 Shaft project and mining rights. As
previously reported, Evander Mines embarked on an exploration
programme to drill a further exploration borehole from surface, to
increase geological confidence in the 2010 Pay Channel orebody, for
which resources are summarised in the table below:
|
|
|
Contained
gold |
Category |
Tonnes
million |
Grade
g/t |
Tonnes |
Moz |
Measured |
0.45 |
8.94 |
4.0 |
0.13 |
Indicated |
0.70 |
7.11 |
5.0 |
0.16 |
Inferred |
4.13 |
8.93 |
36.9 |
1.19 |
Total |
5.28 |
8.69 |
45.9 |
1.48 |
On 6 July 2017, the exploration
borehole successfully intersected the Kimberley reef at a depth of
approximately two kilometres, highlighting a reef intersection with
a 6cm width at 36.8g/t. Additional drilling deflections will be
performed to further delineate the ore body. The previous borehole
into the 2010 Pay Channel yielded a reef intersection with a 49cm
width at 36.04g/t.
|
|
|
Grades |
Borehole |
Depth
m |
Core width
cm |
g/t |
cmg/t |
2245 |
2 059.3 |
49.0 |
36.04 |
1 766 |
EGM PAR 1 |
2 014.6 |
5.7 |
36.8 |
210 |
EGM PAR 1-Deflection 1 |
2014.9 |
5.7 |
33.2 |
189 |
EGM PAR 1-Deflection 2 |
2 014.8 |
4.8 |
144.7 |
694 |
Harmony Gold Mining Company Limited previously developed the No
7 Shaft mine workings towards the 2010 Pay Channel. However due to
financial constraints and a reassessment of capital expenditure
priorities, it halted all development on the Evander Mines’ shafts
(other than No 8 Shaft) in 2009. This resulted in the controlled
flooding of the development ends and No 7 Shaft’s No 3 Decline,
from 22 Level up to 18 Level. Following the dewatering, only
standard footwall and on-reef development would need to be
completed, with the associated engineering infrastructure, before
mining can commence.
The 2010 Pay Channel is approximately 4.5 kilometres in tramming
distance from No 7 Shaft, which is currently used by Evander Mines
for hoisting to the Kinross metallurgical plant. This compares
favourably with the No 8 Shaft mining areas, which is approximately
12 kilometres in tramming distances from No 7 Shaft.
The Pan African Resources’ project team has commenced a
feasibility study related to the No 7 Shaft No 3 Decline and the
2010 Pay Channel resource, which will address the following
critical issues:
- Collation of geological data from the drill-hole intersection
and deflections.
- The cost and timing of dewatering and re-equipping the No 7
Shaft No 3 Decline from 18 Level to 22 Level.
- The development cost and timing to access the 2010 Pay
Channel.
- The economic viability of the project.
The 2010 Pay Channel can potentially increase Evander Mines’
underground gold production materially at a relatively low capital
cost, using Evander Mines’ established shaft and metallurgical
facilities. The feasibility study for the project is expected to be
completed during the first quarter of the 2018 financial year.
Reporting in compliance with SAMREC Code
To meet the requirement of the South African Code for the
Reporting of Exploration Results, Mineral Resources and Mineral
Reserves (“SAMREC Code”) that the material reported as a Mineral
Resource should have “reasonable and realistic prospects for
eventual economic extraction”, Pan African Resources has determined
an appropriate cut-off grade which has been applied to the
quantified mineralised body. In determining the cut-off grade, Pan
African Resources uses a gold price of R600 000/kg. At Pan African
Resources’ underground mines, the optimal cut-off is defined as the
lowest grade at which an orebody can be mined such that the total
profits, under a specified set of mining parameters, are maximised.
The Mineral Resource optimiser tool that was accordingly developed
in-house was applied to the Mineral Resource inventory.
The optimiser programme requires the following inputs to convert
the Mineral Resource to the Mineral Reserve:
- the database inventory of all mineral resource blocks;
- an assumed gold price – ZAR550
000/kg;
- planned production rates for each mine;
- plant recovery factors; and
- planned cash operating costs.
The Mineral Reserves represent that portion of the Measured and
Indicated Mineral Resources above cut-off in the LOM plan, and have
been estimated after consideration of the modifying factors
affecting extraction. A range of disciplines has been involved at
each mine in the LOM planning process including geology, surveying,
planning, mining engineering, rock engineering, metallurgy,
financial management, human resources management and environmental
management.
Note: Mineral Resources are inclusive of the Mineral Reserve,
unless otherwise stated. Rounding of numbers contained in this
announcement may result in minor computational discrepancies.
Competent Person
The competent person for Pan African Resources, Mr Barry Naicker, the group Mineral Resource
Manager, signs off the MR&MR for the Group and has reviewed and
approved the information contained in this announcement in writing.
He is a member of the South African Council for Scientific
Professions (400234/10). Mr Naicker has 16 years of experience in
economic geology and mineral resource management.
He is based at 1st Floor, The Firs, cnr. Cradock and Biermann
Avenues, Rosebank, 2196, Gauteng.
Johannesburg
20 September 2017
Contact Information
Corporate Office
The Firs Office Building
1st Floor, Office 101
Cnr. Cradock and Biermann Avenues
Rosebank, Johannesburg
South Africa
Office: + 27 (0) 11 243 2900
Facsimile: + 27 (0) 11 880 1240
Registered Office
Suite 31
Second Floor
107 Cheapside
London
EC2V 6DN
United Kingdom
Office: + 44 (0)20 7796 8644
Facsimile: + 44 (0)20 7796 8645
Cobus Loots |
Deon Louw |
Pan African Resources PLC |
Pan African Resources PLC |
Chief Executive Officer |
Financial Director |
Office: + 27 (0)11 243 2900 |
Office: + 27 (0) 11 243 2900 |
Phil Dexter |
John Prior / Paul Gillam / James
Black |
St James's Corporate Services
Limited |
Numis Securities Limited |
Company Secretary |
Nominated Adviser & Joint
Broker |
Office: + 44 (0)20 7796 8644 |
Office: +44 (0)20 7260 1000 |
Sholto Simpson |
Matthew Armitt / Ross Allister |
One Capital |
Peel Hunt LLP |
JSE Sponsor |
Joint Broker |
Office: + 27 (0)11 550 5009 |
Office: +44 (0)020 7418 8900 |
Jeffrey Couch / Neil Haycock / Thomas
Rider
BMO Capital Markets Limited
Joint Broker
Office: +44 (0)20 7236 1010
Julian Gwillim
Aprio Strategic Communications
Public & Investor Relations SA
Office: +27 (0)11 880 0037
www.panafricanresources.com