Jan Nelson, CEO,
Pan African
 
Johannesburg, South Africa — MININGREVIEW.COM — 22 May 2009 – Pan African – a mining, exploration, and development company with mainly gold-focused operations on the African continent – has exercised the option to acquire 100% of Phoenix Platinum (Pty) Limited from Metorex Limited for a cash consideration of R71.25 million.

A statement from Pan African released here said the company had exercised its option a month ahead of schedule, after detailed sampling had indicated that grades were better than expected from an earlier pre-feasibility study conducted by the seller, Metorex.  
 
By exercising the option earlier and paying an upfront cash amount of R44.8 million the company had received a 5% discount on the original purchase price of R75 million, as well as credit terms to pay the balance of R14.5 million on a pro rata basis over 12 months. The consideration would be settled through the company’s current capital working cash flows.
 
The re-evaluation of 360,000 ounces of PGM tailings sources had indicated 4E grades ranging from 1.11g/t to 4.18g/t. Initial results had shown that a recovery of 55% was possible. Total cash cost anticipated for the project was less than US$350/oz.  
 
In assessing the financial viability of the project, a basket price of US$1 366/oz has been used over the life of mine which is estimated to be seven years on current surface tailings, and 14 years, including current arisings.
 
“Making this acquisition now and strengthening our team will enable us to bring the project into production sooner to accelerate our cash flow in line with our stated aim of focusing on near-term, high-yield, low-cost assets,” said CEO Jan Nelson. “We anticipate that at full production we will recuperate the capital expenditure for this asset within 14 months.”