Pan African Resources, listed on the JSE and AIM, has announced positive results for the independent Definitive Feasibility Study (DFS) for its Elikhulu tailings project. As a consequence, the Pan African board of directors has approved the construction of the project, subject to finalisation of the project financing package.
The DFS results indicate excellent recovered grades and gold production, attractive financial returns and a low execution risk, with the DFS results surpassing expectations of previous technical and financial assessments of the project. The DFS was undertaken by DRA Projects.
The planned commencement date of the project is January 2017, with first gold forecast for the final quarter of the 2018 calendar year and full commissioning in December 2018.
Annual recoverable gold production of approximately 56 000 ounces is projected for Elikhulu’s initial eight years of operations and 45 000 ounces of gold for the remaining five years thereafter. Optimal plant capacity for the project allows 12 Mt/a throughput. Current arisings and inferred gold resource could extend project life beyond the DFS estimated life of 13 years. The projected AISC over the life of Elikhulu is US$523/oz.
Initial capital cost is forecast at approximately R1,74 billion (US$119,9 million). The internal rate of return (IRR) (real, post-tax) is 23,1 % with a payback period of less than four years, based on an assumed gold price of US$1 180/oz.
Pan African believes the experience gained in the construction and operation of the Barberton Tailings Retreatment Plant (BTRP) and the Evander Tailings Retreatment Plant (ETRP) positions it to successfully execute the construction and operation of Elikhulu.
The project entails establishing facilities and infrastructure at Evander Gold Mining, owned and operated by Pan African, to retreat gold plant tailings at a rate of 1 Mt/month. This is in addition to the existing production from the ETRP which will continue to operate independently for the next 13 years.
Three existing tailings storage facilities will be reclaimed, in the following order: Kinross, Leslie and Winkelhaak. Post processing, these will be consolidated into a single enlarged Kinross tailings facility, contributing to reducing Evander’s environmental footprint and associated environmental impact.