Pan African Resources has closed the transaction to buy parts of Mintails SA, the mid-tier gold producer announced on Thursday.
The R50m deal will see Pan African Resources take over Mogale Gold and the Mintails SA Soweto Cluster. Both belong to Mintails Mining SA (MSC), which was in provisional liquidation in 2018.
The deal is part of Pan African’s strategy of producing gold from low-cost operations and diversifying its operations to include both underground and low-risk surface operations.
“Pan African is pleased to have finally closed the sale transaction. Our studies have demonstrated robust operational and financial economics, with the project having the potential to further increase our high-margin, long-life production from tailings retreatment operations,” Pan African CEO Cobus Loots said.
Mintails, which mostly extracted gold from dumps on the West Rand, was majority-owned by Australian-listed group Mintails Ltd and initially applied for business rescue — a provision under the Companies Act to rehabilitate financially distressed corporations — in October 2015. But failure to turn the business around resulted in the operation being placed into liquidation in September 2018.
Pan African produced its most gold yet in its 2022 financial year as production for the year end-June was up 1.9% to 205,688oz.
The R7.67bn company, with underground and tailings retreatment operations in Gauteng and Mpumalanga, said it expects to maintain its 2022 production levels in 2023.
It added in its 2022 results that it is making progress with the development of the Mintails tailings re-mining facility that it wants to develop at a surface gold resource near Carletonville, west of Johannesburg.
A definitive feasibility study conducted by Pan African found the Mogale Gold tailings storage facilities have the potential to increase the group’s annual gold production by more than a quarter over an initial life of mine (LOM) of 13 years. Re-mining the MSC tailings storage facilities could boost production and extend the life of mine to 21 years, according to Pan African.
The miner has started with the engineering optimisation studies and the impact assessments required for the environmental authorisation process.
“The area where Mintails is situated presents a number of environmental and social challenges. We will require the assistance of the government and all the other legitimate stakeholders to successfully address those challenges, remediate the site and develop a world-class project,” the miner said.
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