Name of the Project
Egoli project.

Location
Mpumalanga, South Africa.

Project Owner/s
Pan African Resources.

Project Description
The Egoli project will be South Africa’s newest underground gold mine. The mine will capitalise on Evander Mines’ existing infrastructure, reducing the upfront capital investment.

The project is expected to contribute incremental production of about 72 000 oz/y over its minimum nine-year mine life at a head grade of 6.61 g/t of gold.

Life-of-mine (LoM) gold production is estimated at 570 000 oz.

The LoM excludes the inferred mineral resources of 6.26-million tonnes at 9.68 g/t of gold, which will be accessed once underground development is in place, and can potentially increase the LoM to 14 years.

The project initially requires about 560 m of underground development from the existing No 3 decline and will benefit from existing infrastructure such as vertical shafts, hoisting capacity and an operating metallurgical processing plant.

The existing Kinross metallurgical plant will be refurbished to process the ore.

Potential Job Creation
The project is expected to provide employment for about 1 200 people.

Net Present Value/Internal Rate of Return
The project has a net present value of R2.01-billion and an internal rate of return of 50.1% at a gold price of $1 650/oz. Project payback is estimated at 3.8 years.

Capital Expenditure
Peak funding is estimated at R1.05-billion. Finalisation of the legal agreements for the implementation of the project’s debt funding package is under way.

Planned Start/End Date
The project is expected to take 20 months to complete. Ramp-up to steady-state production is expected to take 16 months thereafter.

Latest Developments
The previously announced reprioritisation of organic growth opportunities and associated capital expenditure plans have resulted in the reappraisal of the Egoli project’s development scheduling and fast-tracking of mining opportunities at Evander Mines’ 24, 25 and 26 Levels, with these areas accessible from existing 8 Shaft infrastructure.

This reprioritisation is expected to result in improved cash returns and will require a materially reduced capital outlay, compared with Egoli’s earlier development plan.

Egoli will now be developed in a phased approach, with dewatering expected to start before the end of the current financial year, followed by mineral reserve delineation drilling to accurately define the payshoot for early mining.

Key Contracts, Suppliers and Consultants
DRA Global (feasibility study and engineering, procurement and construction management).

Contact Details for Project Information
Pan African Resources, Juanita Maijsen, tel + 27 11 243 2900 or email ExecPA@paf.co.za.