28th Mar 2014 13:18
LONDON (Alliance News) - Pan African Resources PLC Friday said it has approved the start of construction of the Evander Tailings Retreatment Project in South Africa.
The African-focused precious metals and mining company said the project comprises a total mineral resource of 597,000 ounces of gold contained in Dams 1, 2 and 3 of the Kinross tailings storage facility and a mineral reserve of 369,000 ounces.
The company said a total estimated capital expenditure budget of ZAR200 million has been approved for the project in order to recover roughly 2.2 million tonnes of ore per year of gold tailings over a 14 year life-of-mine.
Pan African added that based on its plan, the facility should contribute roughly 10,000 ounces per year to Evander's gold production, with commissioning expected to commence in January 2015 and full-production planned for June 2015.
The company said the estimated net present value of the project is ZAR170 million, with a forecast project payback period of less than five years.
Pan African said Basil Read-Matomo has been contracted to design, procure and construct the Evander Tailings Retreatment Project and Fraser Alexander will construct the Tailings Storage Facility and operate the re-mining operation.
The company completed the acquisition of Evander Gold Mines Ltd, which operates the site, in March 2013, and noted in September 2013 that production from the site helped pretax profits increase 23% in its full-year ended June 30.
Pan African Resources managed to increase the amount of gold sold by 38% to 130,493 ounces from 94,449 ounces as the Evander Mines added production to the company over four months. The company expected that the acquisition of Evander Mines would eventually double its gold production to 200,000 ounces per year.
Pan African shares were up 1.8% to 14.50 pence Friday.
By Tom McIvor; [email protected]; @TomMcIvor1
Copyright © 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Pan African Resources