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Third of Pan African gold from low-cost, low-risk surface tailings

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Third of Pan African gold from low-cost, low-risk surface tailings

Pan African Resources CEO Cobus Loots at the financial results presentation covered by Mining Weekly Online’s Martin Creamer. Video and Video Editing: Darlene Creamer 20.09.2017

20th September 2017

By: Martin Creamer
Creamer Media Editor

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JOHANNESBURG (miningweekly.com) – More than a third of the yearly gold production of Pan African Resources is destined to arise from low-cost, low-risk tailings businesses, which have long lives ahead of them.

Pan African CEO Cobus Loots told investors, analysts and journalists at the company’s presentation of financial results on Wednesday that the London- and Johannesburg-listed midtier mining company expects to produce 190 000-oz-plus of gold in its 2018 financial year. (Also watch attached Creamer Media video).

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The Africa-focused precious metals mining company, which has a resource base of 34-million ounces of gold, in the 12 months to June 30 invested capital totalling R613-million on sustaining and expanding its underground and surface operations at Evander and Barberton.

In the 12 months to June 30, its existing tailings businesses contributed 56 218 oz of gold at an all-in sustaining cost (AISC) of $477/oz, with the company reminding stakeholders of the “game-changing” efficacy of the upcoming R1.7-billion Elikhulu gold tailings project now under construction.

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Elikhulu, which will begin to produce gold in the last quarter of the 2018 calendar year, will itself produce 56 000 oz of gold a year for the first eight years of its 14-year life-of-mine and 46 000 oz/y for the last six years.

Meanwhile, the Barberton Tailings Retreatment Plant is producing 20 000 oz/y at the low AISC of $392/oz, and will do so for the next 14 years, after paying off its initial R325-million capital in 18 months.

“It really is world class,” Loots said at the results presentation attended by Mining Weekly Online.

The Evander Tailings Retreatment Plant, which paid for itself in less than three years and still has 15 years ahead of it, is producing 15 000 oz a year at an AISC of $554/oz.

This tailings plant has acted as a pilot for the upcoming Elikhulu project, which is forecast to produce at an AISC of less than $550/oz and which is on schedule and on budget.

“It’s very important to emphasise that post the commissioning of Elikhulu, more than a third of our total gold production will come from these very low-cost and low-risk tailings businesses,” Loots added.

The company has more than 200-million tonnes of tailings on surface at Evander.

Cooperation from all stakeholders for Elikhulu has been described as excellent. Both the Department of Mineral Resources and the Department of Water Affairs and Sanitation are said to have acted professionally and efficiently in interrogating and progressing applications and permits.

“This collaboration between government and business is an example of how major capital projects in South Africa can be executed for the benefit of all,” said Loots.

Elikhulu’s production profile of 56 000 oz/y for the first eight years and 46 000 oz/y for the last six years excludes resources of 244 398 oz of gold locked up in the soil below the tailings storage facilities, which should provide additional life.

“Hopefully in the next year we can firm up on that and include it in our reserve. We are seeing at Barberton that the soils do contain gold and we can successfully process this material,” he disclosed.

Once Elikhulu is producing at steady state, surface production is expected to rise to 91 000 oz/y at an AISC of $516/oz.

In years to come, Pan African expects to reverse the decline in its underground production at its Barberton Mines, where investment in infrastructure is continuing.

It has commissioned a R30-million refrigeration plant at the Fairview mine, where in-stope temperature has been reduced and the potential for productivity enhanced.

It has embarked on a two-year sub-vertical shaft project to alleviate congestion at Fairview No 3 decline. The 4.1-m-diameter shaft will extend from 42 to 64 level through raiseboring.

The sub-vertical shaft will be equipped to hoist people and material and thereby free up the current No 3 decline to hoist only ore.

The current mining level is at 66 level, which is 1.6 km below surface.

The underground mine at Evander, also a long-life quality orebody, is certainly not without many challenges, as the last financial year demonstrated.

“It’s also true that if Evander underground sneezes, the whole of the Pan African group catches a cold,” Loots commented to Mining Weekly Online.

To ensure that Evander progresses, the company is continuing to conduct repairs, embarking on mining and cost optimisation programmes and is investigating ways of reducing electricity usage and alternative power supply sources.

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