Name of the Project
Mogale Tailings Retreatment (MTR) project.

Location
Near Krugersdorp, to the west of Johannesburg, in Gauteng, South Africa.

Project Owner/s
Pan African Resources.

Project Description
The project comprises various individual dams containing a probable mineral reserve of 123.6-million tonnes of remineable material at a head grade of 0.29 g/t for an estimated content of 1.14-million ounces of gold.

It has the potential to increase Pan African’s gold production profile over the coming years.

Remining the Mogale Gold tailings storage facilities is expected to add about 50 000 oz/y of production over its 13-year life-of-mine (LoM). The project entails low unit-cost hydromining, with low project-execution risk, at 800 000 t a month using a carbon-in-leach plant, similar to Pan African’s Elikhulu operation that processes 1.2-million tonnes a month, with up to 900 000 t a month achievable without negatively affecting performance.

The addition of Mintails’ Soweto Cluster resource has the potential to extend the LoM from 13 years to 21 years and further increase yearly gold production.

In March 2024, Pan African completed an internal prefeasibility study (PFS) for the Soweto Cluster resource, which forms part of the MTR. The PFS considered numerous options, with the most feasible being the development of remining, overland piping and pumping infrastructure at the Soweto Cluster resource to process the material at the MTR plant.

The PFS shows that the addition of the 110-million-tonne Soweto Cluster mineral resource has the potential to increase MTR production to about 60 000 oz/y over a 21-year LoM.

Potential Job Creation
The estimated 500 employees that are needed for the construction of the project have largely been sourced locally.

Net Present Value/Internal Rate of Return
Pan African reported in May 2024 that it had updated the project's financial model to include the latest operating cost and production estimates, forecast rand:dollar exchange rate and dollar gold price.

The updated model is based on an exchange rate of R19/$, compared with the R15.50/$ used in an earlier definitive feasibility study (DFS), while the gold price forecast has increased to $2 200/oz, compared with the $1 750/oz used in the DFS.

As a result of these changes, the project's pretax net present value (NPV) has increased to $183-million, from $63-million in the DFS, while the ungeared real internal rate of return has increased to 41.7%, from 20.1% in the DFS.

The payback on upfront capital investment of about $135.1-million has decreased, to about two years, compared with the three-and-a-half years estimated in the DFS.

At a gold price of $2 200/oz and an exchange rate of R19/$ , the pretax NPV combined for the Mogale and the Soweto Cluster is $283-million, representing an increase of $96-million, relative to Mogale's updated standalone financial model.

Capital Expenditure
Construction capital expenditure (capex) is estimated at $161.3-million.

The Soweto Cluster will require additional capital of $113-million, with about $83-million to be incurred from year 4 to 6, and $29-million in Year 10, of the MTR's operation.

Planned Start/End Date
Construction started in July 2023. Commissioning of the project is expected in the latter half of 2024, while steady-state production is expected by December 2024.

Latest Developments
The project remains on schedule for commissioning and steady-state production in December, Pan African has reported. The company also does not expect any expenditure overruns.

Pan African says it will now proceed with the necessary permitting and servitudes required for the remining and processing of the Soweto Cluster, with a final investment decision in due course.

Key Contracts, Suppliers and Consultants
DRA Projects (definitive feasibility study); and SGS Bateman (EPCM).

Contact Details for Project Information
Pan African Resources, tel + 27 11 243 2900 or email info@paf.co.za.