Johannesburg, South Africa — MININGREVIEW.COM — 26 February 2009 – Junior gold producer and exploration group Pan African Resources has terminated its exploration activity in Ghana, incurring a £1.3 million (R19 million) expense. The company is putting additional money into its Manica prospect in Mozambique to bulk up resources to make a project there viable.
JSE-listed Pan African – which is 55% owned by diversified South African miner Metorex – produced 51 186 ounces in its interim period at a total cash cost of US$451/oz, a 12% improvement on the same period a year earlier.
“Tonnes milled were slightly down on plan and an unsustainable, exceptionally high grade was achieved. Recovered grade is expected to be more in line with the historic average going forward,” the company said.
Operating profit rose 114% to £8.5 million (R123 million), more than doubling from a year earlier. Headline earnings were up 202% at £3.9 million (R56.5 million). The received gold price increased to $824/oz from $721.
The company announcement said that Manica in Mozambique had long been touted as the next mining project for Pan African, but there was a long way to go yet and it was not certain there would be a mine there. The company would spend £1 million (R14.5 million) on a 10-month programme to "consolidate" more oxide ore near Manica to render the project viable. A decision would be made at the end of that period.
Pan African’s work there has bulked up the resources to 2.57 million oz contained in nearly 34 million tonnes at a grade of 2.36 grams/tonne.
Disappointing drilling results in Ghana, coupled with the difficult global economic environment, have prompted Pan African not to follow its rights to the Kyereboso and U&N prospects in that country. It is in talks to sell the Akrokerri project there too.
Pan African has increased its stake in two prospects in the Central African Republic (CAR) because its partner has not stumped up any money towards exploration there. The exact figure will be released at a later date.