JSE-listed Pan African Resources has identified a preferred option to expand gold production by processing its Soweto tailings storage facilities (TSFs) through a 600 000-t-a-month integrated circuit at its existing Mine Tailings Retreatment (MTR) operation.

The prefeasibility study for the Soweto Tailings Retreatment (STR) circuit indicates a lower capital requirement, a faster construction period, reduced permitting obligations and strong financial returns compared with a standalone carbon-in-leach (CIL) plant.

The Soweto TSFs, acquired by Pan African Resources in 2021 as part of the Mintails SA transaction, contain mineral reserves of 108-million tonnes at 0.28 g/t for 980 000 oz of gold.

Two options were evaluated in the feasibility study: a one-million-tonne-a-month standalone CIL plant, for which a definitive feasibility study (DFS) was completed, and a 600 000-t-a-month expansion circuit integrated into the existing MTR operation, studied to prefeasibility level.

The integrated option was selected as the preferred approach owing to operational synergies and lower upfront costs. The DFS for the preferred option is expected to be completed by June 2026, with a final board decision on project construction to follow shortly thereafter.

Under the preferred option, the MTR operation will incorporate a new 600 000-t-a-month module, receiving standalone feed from the Soweto TSFs. The construction period is anticipated to be about 24 months, with an estimated capital cost of $160-million, including remining and overland pumping infrastructure and expanded TSFs.

Yearly gold production is projected at 30 000 oz to 35 000 oz for about 15 years at an all-in sustaining cost (AISC) of $1 000/oz to $1 200/oz.

Using a gold price of $2 800/oz, the project returns a post-tax net present value (NPV) of $129.7-million and a real ungeared internal rate of return (IRR) of 29.4%, with payback expected three years after commissioning. At a gold price of $3 500/oz, the post-tax NPV rises to $235.4-million, the real ungeared IRR increases to 40.2%, and payback is expected within two years.

“The successful commissioning of the MTR operation in October 2024, completed ahead of schedule and under budget, again demonstrated Pan African’s ability with regards to successfully commissioning tailings retreatment operations.

“We continue to optimise operations at MTR, with the expansion of its production capacity from about 50 000 oz/y to about 60 000 oz/y to be completed in the next month.

“The addition of the STR circuit would further increase annual production from the MTR complex to almost 100 000 oz/y and leverage operational synergies to reduce the complex’s very competitive AISC even further. Subject to the DFS and final board approval, the STR circuit would fast-track the remining of the Soweto assets and also environmental rehabilitation programmes, positively impacting our local communities in the area,” Pan African CEO Cobus Loots said on November 27.

The company said environmental and permitting processes for the project were progressing according to schedule, with approvals for the environmental-impact assessment and water-use licence expected by June 2026.

Independent engineering studies on the Soweto TSFs have confirmed the stability of the facilities, with no identified failure risks that would endanger surrounding communities.

The company is maintaining the clearing of silted drainage channels around affected TSFs to confine overflow to dedicated evaporation ponds. In addition, Pan African has applied a newly developed binding agent to reduce airborne particulate matter during windy conditions, which is expected to measurably improve air quality in the area.

Pan African’s financial position supports the planned project. Pan African Resources is on track to be fully degeared from a net debt perspective by February 2026, despite the payment of a record dividend to shareholders in December.

The company added that its cash flow generation provides strategic flexibility in funding the STR circuit, with proposals already received from financial institutions.

Further, the STR circuit would also accelerate concurrent environmental rehabilitation programmes initiated during the construction of MTR, including the re-establishment of wetlands and improvements to air and water quality, contributing positively to local communities in the Mogale region.