Aim- and JSE-listed midtier gold producer Pan African Resources has raised its production guidance for the financial year to June 30, by 5 000 oz to 195 000 oz.

It plans to maintain a similar production level for the 2022 financial year, based on current planning.

CEO Cobus Loots says management is pleased with the robust operational performance for the year to date.

In terms of growth projects, the company reports that following positive findings from a fatal flaw analysis conducted into the Mintails Soweto cluster (MSC) and Mogale Gold assets (collectively the Mintails assets), no fatal flaws were identified.

Going forward, Pan African reports that a concept study was conducted on the Mogale Gold assets, including a high-level financial evaluation, with the findings indicating an enhanced tailings throughput feed of about 800 000 t a month, with anticipated recoveries of about 53%.

The estimated upfront capital required of about R1-billion and the R1.7-billion in capital needed over the life-of-mine (LoM) will be confirmed during the next stage of the project planning.

However, the concept study did identify areas that would require further evaluation during the prefeasibility stage of the project, including tailings storage facility deposition capacity constraints, which would require additional development to support the anticipated life of the project.

Also, the study identified the availability of water sources in the area to supply the re-mining of the Mogale Gold or MSC assets, as well as additional confirmatory process test work to confirm gold recoveries.

Key inputs used in the concept study’s financial evaluation include a real discount rate post tax of 10.71%, a gold price of $1 770/oz, an exchange rate of R14.50 to the dollar and a net present value of R1.46-billion.

Other key inputs include a real after-tax internal rate of return of 42.8%, project capital of R1-billion, an expected LoM of 12 years and average production of 44 400 oz/y.

The miner reports that a prefeasibility study will be completed during the third quarter of the current calendar year for the Mintails assets; and, if positive, will be progressed to a definitive feasibility study, expected to be completed during the first quarter of the 2022 calendar year.

EVANDER MINES

Following technical challenges experienced during the initial phases of the 8 Shaft pillar mining, production levels anticipated in the original feasibility study have now been achieved, the miner reports.

This operation is expected to produce an average of 34 000 oz/y over its remaining LoM of two years and five months, measured from the end of the 2021 financial year.

As for Evander’s 8 Shaft decline operations, deep level underground mining at Evander was ceased during May 2018 after a decline in the rand gold price at the time, with Pan African continuing to maintain the mine’s infrastructure integrity to preserve the mineral resources.

However, as part of its medium-term capital deployment strategy, Pan African has commissioned an internal technical and economic study to assess the merits of mining the number two decline on 24 Level project (Phase 1).

This study will be followed by a Phase 2 study that will assess the merits of extending mining to 25 and 26 levels.

Phase 2 is designed to use a proven on-reef mining layout, reducing waste and significantly reducing the time for orebody access development.

Phase 1 mining will extend Evander’s 8 Shaft production profile, post-cessation of the 8 Shaft pillar mining, for an additional two-and-a-half years and maintain yearly production of about 34 000 oz.

The 24 Level project will result in a five-year life for the Evander 8 Shaft complex.

EVANDER SOLAR PLANT

Pan African’s 9.97 MW solar photovoltaic (PV) plant at its Evander mine, being commissioned by juwi Renewable Energies, has commenced with civil works and the procurement of major components, with commissioning anticipated in the third calendar quarter of this year.

The solar PV plant will provide an estimated 30% of Elikhulu’s power requirements, resulting in a reduction of fossil fuel-generated power and an expected yearly carbon dioxide saving of more than 26 000 t in the first full year of operation.

Also, Pan African notes that a feasibility study for a similar solar PV plant at Barberton Mines is currently being undertaken, as well as expanding the Evander plant currently being constructed to meet the Evander underground power requirements and to reduce the escalating cost of electricity.