14th Nov 2006 07:02
Pan African Resources PLC14 November 2006 14th November Pan African Resources PLC ("Pan African" or "the Company") Results of Independent Mining Valuation on Surface Mine at Manica project - Mozambique Pan African Resources PLC (AIM : PAF), the African based gold explorationcompany, announces the results of an independent mining evaluation of the FairBride deposit on its Manica gold project in Mozambique. Highlights of the evaluation are: • Life of mine (LOM) average production of 84,000 ounces of gold per annum • Open pit mine life of 8.5 years • Life of mine average cash operating cost of US$387 / ounce • IRR of 31% • An ungeared, pre-tax and royalty project NPV of US$39 million at a gold price of US$600/oz and a discount rate of 12% Introduction The Fair Bride prospect represents only one of several prospects within theManica project. Work to date has been directed at evaluating the economicviability of mineralization at the Fair Bride prospect. Until recently only 12%of the mineralized strike-length had been explored. Pan African has beenfocusing its exploration activity on delineating drill targets within the otherprospective areas. Based on the results from the mining evaluation it is thecompany's intent to complete its drill target delineation by year-end andcommence drilling in Q1 of 2007. The focus of the drilling programme will be toidentify and prove-up additional mineralized zones to Fair Bride. About the Study Mining and Engineering firm, Turgis Consulting (Pty) Ltd ("Turgis") hascompleted an independent mining evaluation on the company's Manica gold projectin Mozambique and has concluded that the Manica project has definite economicpotential considering the economic input parameters. Jan Nelson, CEO, Pan African, commented: "The company is very pleased with theresults from the independent mining evaluation completed by Turgis, which showsthe deposit to be commercially viable under current economic conditions. Thereis still room for improvement on capital and working cost estimates, sulphiderecoveries and the life of mine, and we are currently addressing these factors. "Furthermore, the results from the recent bulk sampling at Fair Bride indicate asignificantly higher sulphide grade of 3.73g/t in situ as opposed to a resourceestimated sulphide grade of 2.61g/t in situ used in the Turgis study. This is anincrease of over 1.12g/t and could significantly improve the current NPV of theproject if validated. Work is currently underway to produce independentvalidation of these results after which Turgis will revisit their evaluation." The independent mining evaluation is conceptual in nature and the currentnumbers are being finalised to pre-feasibility accuracy levels as part ofpre-feasibility study to be completed before year-end. The economic potential ofthe deposit was determined by using Whittle software to optimise the open pitdesign. Input parameters from mining evaluation are: Gold price: US$600/oz Production rate: 100,000 tonnes / month Oxide recoveries: 90.12% Sulphide recoveries: 86% Mining recovery: 100% Mining dilution: 5% Mining operating cost: US$2/t mined (average over LOM) Oxide processing cost: US$7/t (average over LOM) Sulphide processing cost: US$11.25/t (average over LOM) Capital cost: US$68 million About the Resource / Mining / Metallurgical estimates used in the study The resource used in the mining evaluation study has been independently verifiedby ExplorMine which acts as Competent Person to the company. Resource estimateswere calculated by independent geological and resource firm Geologix MRC. Turgis has reviewed all technical information relevant to the mining study. Metallurgical recoveries and capital cost estimates used in the miningevaluation were taken from an independent report compiled by Mr. Jan vanNiekerk, Senior Metallurgical Consultant (Refractory Ores) for Gold Fields BIOX(R). Geologix MRC has verified the results from the metallurgical bulk samplingexercise and confirm that the grade from the sulphide zone from the bulksampling exercise is 1.12g/t higher than the resource estimate for the sulphidezone. Sulphide grade from bulk sampling is 3.73g/t as opposed to a resourceestimated grade of 2.61g/t. This is a difference of 1.12g/t. ENDS For further information on Pan African Resources please visit the website atwww.panafricanresources.com. A copy of the Mining Valuation report will beposted on the website. Enquiries: Pan African Resources Ambrian Partners Parkgreen CommunicationsJan Nelson, CEO Richard Brown Justine Howarth /+27 11 886 1211 +44 (0) 207 776 6400 Victoria ThomasColin Bird, Chairman +44 (0) 20 7493 3713+44 (0) 20 7584 2155 NOTES TO THE EDITOR About the Consultants Turgis Consulting was established in 1990 as a specialist technical consultingfirm serving the mining industry. The company has worked with mining companiesin South Africa, Zimbabwe, Ghana, Botswana, Madagascar, Chile, Brazil,Australia, Zambia, Ukraine, Norway and in the United Kingdom. Turgisspecialises in all aspects of design and operation of mining, mechanical,electrical and logistic systems for surface and underground mines. Turgis is committed to developing and applying integrated mine designs thatresult in projects that work practically and within design parameters. This isachieved by using experienced practitioners and professionals who have worked inboth production and engineering disciplines on mines. Turgis's independence is ensured by the fact that its ownership rests solelywith its staff and that they have no ownership interests, either directly orindirectly, with any equipment supply company. • ExplorMine Gold Consultants (Pty) Ltd is a South African basedResource & Geological Consultancy - the principle directors and geologists ofthe company are Graham Gavine and Garth Mitchell, who personally oversaw theCPR. • Geologix MRC is a South African based Resource and GeologicalConsultancy - Deon van den Heever was responsible for the resource estimate. • Both companies' geologists are SACNASP accredited and members ingood standing of their respective professional societies. The resourcestatement is SAMREC compliant and this announcement has been verified by bothgeologists. • SACNASP - South African Council for Natural Scientific Professions. • SAMREC - South African Mineral Resource Code (A recognised reportingCode under the Resources Guidelines of the London Stock Exchange, May 2006). This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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