Mid-tier gold producer Pan African Resources has entered into an agreement to acquire historic gold tailings assets owned by Mintails Mining, which was placed in provisional liquidation in 2018.
The provisional liquidation of Mintails SA has resulted in an opportunity for Pan African to acquire gold tailings mineral resources not previously retreated.
Pan African will evaluate the merits of constructing a large-scale tailings retreatment operation, similar to its Elikhulu operation at Evander, also in South Africa.
Under the terms of the conditionalsale-of-shares agreements, Pan African intends to acquire the total share capital (MSC), both of which are 100%-owned by Mintails Mining, for up to R50 million.
The combined mineral resources of Mogale Gold and MSC comprise historic tailings storage facilities (TSFs) that contain an estimated 243 Mt of tailings with a grade of 0.30 g/t gold, for an estimated gold content of 2.36 Moz of gold.
The Mogale Gold TSFs, which comprise various individual dams, contain an estimated 123 Mt of re-mineable material at a head grade of 0.29 g/t, for an estimated content of 1.16 Moz of gold; while the MSC TSFs, which comprise nine separate facilities, contains resources of 119 Mt at 0.31 g/t, containing an estimated gold content of 1.20 Moz.
The purchase price of Mogale Gold, inclusive of the assets, surface rights permits, deposition rights, mining right, water use licence, rehabilitation liabilities and shareholder loans for a cash is R37.5 million, while the purchase price of MSC, inclusive of its assets, rehabilitation liabilities and shareholder loans is R12.5 million.
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The proposed transactions are conditional on due diligence and feasibility studies over a period of six to nine months and other conditions precedent typical for a transaction of this nature, including, inter-alia, consent for the transfer of the mining right by the Department of Mineral Resources and Energy, approval from the South African Competition Commission authorities if applicable, and approval for the provisional liquidators to implement the proposed transactions.
“The opportunity to acquire these surface resources complements our strategy of focusing on safe, low cost gold mining opportunities, with the potential to further grow our business by developing projects that meet our stringent investment criteria,” says Pan African Resources CEO Cobus Loots.