Elikhulu is expected to produce approximately 56 000 oz of gold per year for its first eight years of operations and 45 000 oz of gold for the remaining five years.
Commissioning and first gold of the project is forecast and expected in the final quarter of the 2018 calendar year.
[quote]“The completion of the proposed equity portion of the Elikhulu funding package and subsequent construction of the project will represent another key milestone for Pan African Resources,” comments Pan African Resources CEO, Cobus Loots.
“Elikhulu is expected to deliver low-risk and low-cost gold production within a relatively short time-frame. This initiative, together with our recently announced coal disposal, is consistent with our strategy of pursuing and executing value accretive opportunities both within and outside of South Africa.”
Pan African Resources will apply for admission of the placing shares to trading on AIM and to the JSE for the listing of the placing shares on the main board of the JSE.
Background to and reasons for the placing
The net proceeds of a placing will be used to advance Elikhulu towards expected first gold production in the final quarter of 2018 with the mine construction anticipated to commence in the third quarter of 2017.
Fast tracking earthworks and placing deposits for long lead items whilst awaiting the full RMB facility draw down will have numerous advantages to the company in maintaining its proposed timelines.
Pan African Resources received credit approval for a R1 billion underwritten loan facility with RMB. It is a 7-year term at a competitive prevailing interest rate.
The debt facility has credit approval but remains subject to finalisation of definitive legal agreements, and the fulfilment of conditions precedent including licensing approvals and other conditions typical/customary for a facility of this nature.