Johannesburg, South Africa — 30 August 2012 – Pan African Resources “’ an AIM and JSE-listed precious metals producer operating in South Africa and Mozambique “’ has sold its Manica gold project in Mozambique to a local subsidiary of ASX-listed Terranova Minerals in a cash and shares transaction potentially worth R52.5 million.
Miningmx reports that the company first announced its intention to dispose of Manica in 2011.
The buyer is Auroch Minerals Mozambique, which will pay Pan African an initial R17.5 million in cash and 25 million company shares. Pan African would be entitled to further tranches of cash and shares payments over the next four years on the achievement of certain project milestones by Auroch.
“Pan African expects to utilise the cash portion received for the funding of the construction and development of its Bramber tailings retreatment project, and expects to retain the Terranova Shares received so as to continue to participate in the development of Manica,” the company said in a statement issued here.
Terranova is a mineral exploration company which has gold projects in Western Australia, although going forward its primary focus will be on Manica.
The Manica project, which spans 42su km, is positioned in Mozambique’s Beira Corridor and has a JORC resource of some 3Moz at 1.83g/t Au. The area surrounding Manica is well known for hosting gold mines such as Penhalonga, Rezende, Monarch and Old West.
“The disposal of Manica allows us to remain focused on our strategy for the development and growth of our South African-based operating assets,” said Pan African CEO Jan Nelson.
“Although we are no longer intent on developing exploration projects, we believe this project and the Auroch executive team have the potential to develop it into a significant gold producer.”
Source: Miningmx. For more information, click here.