Pan African pegs Soweto project investment at nearly ZAR4 billion
Pan African Resources PLC said on Friday it will decide on investment in its Soweto tailings retreatment project in December after completing a crucial study.
The Rosebank, South Africa-based gold producer said it has completed a definitive feasibility study for the project. Soweto is part of Mintails Mining SA Pty Ltd, which Pan African acquired in October 2022. Mintails owned Mogale Gold Pty Ltd and Mintails' SA Soweto Cluster Pty Ltd at the time of the transaction.
The study identified potential capital savings of about ZAR718 million, reducing estimated project capital to around ZAR3.68 billion from some ZAR4.40 billion, Pan African said.
Using a gold price of USD3,550 an ounce, the post-tax net present value of the Soweto tailings retreatment project is approximately ZAR1.85 billion or USD109 million.
Pan African said it expects a final investment decision in December, subject to board approval, project financing and receipt of the statutory authorisations.
The definitive feasibility study evaluated the construction of a 600,000 tonnes per month Soweto tailings retreatment operation, adjacent to the existing Mogale tailings retreatment processing facility.
Construction of the Soweto tailings retreatment plant is likely to be about 28 months from the final investment decision.
Annual gold production of 35,000 ounces to 40,000 ounces from the Soweto tailings retreatment is expected, with life-of-mine production of approximately 561,000 ounces over around 15 years.
All-in sustaining cost is estimated at between USD1,750 an ounce and USD1,800 an ounce, excluding cost savings from renewable energy supply.
The Soweto tailings retreatment comprises mineral reserves of approximately 108 million tonnes.
Pan African said the environmental impact assessment and permitting process is well advanced.
Shares in Pan African were down 1.8% at 123.90 pence on Friday in London, and lost 2.4% to ZAR27.06 in Johannesburg.
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