Gold mining company Pan African is completing a feasibility study into the construction of a 10 MVA solar power plant at its Elikhulu Tailings Retreatment Plant, in Evander, Mpumalanga.

The R1.74-billion project uses a conventional carbon-in-leach circuit with a proprietary preoxidation process through which one-million tons of tailings is processed a month at an all-in sustaining cost (AISC) of production of between $650/oz and $700/oz. The 14-year-life, 40-employee Elikhulu, which is performing better than expected, is producing at a rate of 55 000 oz/y of gold.

In the 12 months to June 30, total gold production of the London Aim- and JSE-listed company rose by 54.1% to 172 442 oz, exceeding full- year production guidance of 170 000 oz, and AISCs per ounce fell by 27.2% to $988/oz.

In a video interview with Mining Weekly, Pan African CEO Cobus Loots said the envisaged solar plant would fully satisfy the electricity needs of Elikhulu.

“If there’s one site which we think makes total sense for solar, it’s Elikhulu. It doesn’t use that much electricity – we can pretty much support all of it via this plant. Let’s wait for the results of the feasibility and we’ll take it from there,” he added.

Pan African is constantly looking at ways of optimising electricity use throughout the group, which will continue.

On growth plans, Loots said: “We don’t have to grow to realise value for shareholders. If we simply run our own portfolio in a reasonably good manner, you’ll see the value to shareholders come through.

“That said, we continue to look at opportunities – we would be silly not to – and every time we do so, we learn a little bit more about our own assets also.”

Forty per cent of Pan African’s gold now comes from surface operations and there are more tailings opportunities.

But that is not stopping the company from picking low-hanging underground fruit, with the Egoli underground project at Evander presenting itself as a near-term growth opportunity.

“If our Egoli project was anywhere else in the world, it probably would be listed by itself and have a decent market capitalisation, especially if it had the ability to deliver and actually bring the project on stream.

“I don’t think anywhere else you can get 100 000 oz of production for about $40-million of capital.

“Clearly, we’re being quite circumspect about Egoli at the moment. We’ve done very positive studies and we’re awaiting a further optimised study by the end of September, when we start discussing the project with shareholders and with others,” Loots told Mining Weekly.

Much geological work to support the reserve and the resource has been done.

“Being quite sceptical, we even went so far as to drill another hole from surface into Egoli.

“We intersected the reef at a depth of just over 2 km. Five deflections also intersected the reef. The orebody is there,” he said.