Johannesburg, South Africa — MININGREVIEW.COM — 27 February 2012 – Pan African Resources nearly doubled its attributable profit to US$22.6 million (previous interim profit US$11.9 million) in the six months to end-December, and trebled its cash-on-hand since then to US$25 million as of February 17.
Reporting these results to investors here, CEO Jan Nelson said Pan African would remain focused on its operations in South Africa for the medium-term as it bedded down a number of new projects and acquisitions. “We like being in South Africa, which we think is still the best country in Africa in which to develop a mining project,” Nelson added.
London and JSE-listed Pan African was originally set up to develop gold projects in various African countries, with its main exploration programmes focused on the Central African Republic (CAR), Ghana and Mozambique.
The company listed on the JSE in 2007 when it bought control of Barberton Gold Mines from the former Metorex. Since then, Pan African has turned Barberton around and diversified into platinum group metals (PGM) through the Phoenix tailings treatment project.
It shut down its African exploration programme in 2009 and disposed of all these ventures, except the Manica gold project in Mozambique which it is about to spin out as a separate listing on the ASX in April.
The next projects are to double the capacity of the Phoenix plant and to build a gold tailings retreatment facility at Barberton, which will add 25,000 oz of gold to the mine’s current annual production of 95,000 oz.
Nelson rejected criticism by some analysts of Pan African’s latest deal in January through which the company teamed up with Wits Gold to buy Evander Gold Mines (Evander) from Harmony for R1.7 billion in total.
“We like high-grade ore bodies, and the grade at Evander compares very favourably with Barberton,” he said. “I’ve heard comments that mining operations at Evander are ‘high-grading’ the ore body, but they are not, because it is all high-grade ore. “I have put the mine plans up on the wall here, and if anyone can find a low-grade patch of ore for me on those plans then I will buy you a case of whisky,” Nelson said.
“We did not buy Evander for the 34Moz of gold resource it owns. We bought it for the 8Moz of reserves, most of which is at a grade of 8g/t. That’s a high-grade ore body and I don’t know where else in the world you can find an ore body like that.”
Turning to Manica, Nelson said Pan African intended initially selling down its stake to between 35% and 40%.
“Manica will have its own management team. We want to let them do what they need to do and we don’t want to be heavy-handed in terms of running the company.
“It will probably take us about three years to realise full value from the disposal of Manica.”