Johannesburg, South Africa — MININGREVIEW.COM — 08 November 2010 – Pan African Resources (Pan African) has concluded a formal chrome tailings retreatment plant (CTRP) agreement with International Ferro Metals SA (Pty) Limited (IFM) which will enable Phoenix Platinum Mining (Pty) Limited (Phoenix) “’ Pan African’s 100% owned subsidiary “’ to construct and commission the plant at IFM’s Lesedi Mine, 50 km east of Rustenburg.
Being built at Lesedi, the plant will leverage off IFM’s existing infrastructure, as well as regulatory and legislative approvals which will bring forward the start of production.
Pan African CEO Jan Nelson said construction would begin immediately, with full production expected by the end of 2011. He added that total capital cost to build and commission the plant was estimated at R104 million, which would be funded from Pan African’s existing cash resources. About R80 million was payable to IFM.
The CTRP “’ to be developed by Pan African’s wholly-owned subsidiary Phoenix Platinum “’ will recover platinum group metals in a ratio of 60.9% platinum, 21.0% palladium, 16.9% rhodium and 0.2% gold, from surface chrome tailings dams.
Subsequent to the acquisition of Phoenix in May 2009, Pan African has successfully completed a definitive feasibility study of the project with the assistance of a number of metallurgical, geological and engineering consultants. An independent review of the DFS carried out by Venmyn Rand (Pty) Limited confirmed the technical and economical viability of the project.
It would be a substantial contributor to the company’s future profits, despite its relatively small scale.
The project is expected to produce 211 000oz of PGM 4E’s at a plant recovery of 45% over the 17 year life of the operation, with a planned annual retreatment capacity of 240 000t.The cash costs for the CTRP operation are expected to be very low – below $400/oz “’so although ounces produced at around 12 000oz/year will be relatively low, they will be highly profitable ounces.”
”The asset could also provide a stepping stone to treat other tailings in the region, which could lead to an expanded operation,” Nelson said. ” ‘This project is in line with our stated strategy of only developing low cost, high margin and long life projects. The completion of the CTRP will bolster our operating cash flows and enable our company to continue its policy of dividend payments without hampering further growth,” he concluded.