JOHANNESBURG (miningweekly.com) – Midtier gold mining company Pan African Resources, which has been top of the pops as a South African gold share for the most part of this year, on Monday uplifted its 2024 activity further with a share issue announcement on Australia’s Tennant Consolidated Mining Group (TCMG), which is now a wholly-owned Pan African subsidiary.

The Sunday Times Top 100 Companies last month singled out the Johannesburg- and London-listed Pan African as the JSE’s best-performing 2024 gold stock, boosted by its South African gold operations at Mogale, Barberton and Evander.

Pan African’s total gold production is expected to hit the 220 000 oz mark this financial year.

As Mining Weekly reported on November 5, the acquisition of the remaining 92% of TCMG was completed through a share agreement, which brought the total acquisition cost to $54.2-million. In March, Pan African invested $3.4-million in cash, securing an 8% TCMG stake, with the purchase of remaining shares funded by issuing new Pan African shares valued at $50.8-million, which, at the time, represented less than 6% of Pan African’s issued share capital.

Following shareholder approvals at the AGM on November 21, 112 813 217 new ordinary shares would be issued to the sellers of TCMG, Pan African stated in a stock exchange news service announcement on December 9.

On November 8, Pan African announced the listing of a sustainability-linked instrument under the sustainability segment of the JSE. Following an oversubscribed bookbuild, notes worth R840-million were listed under a R5-billion domestic medium-term note programme.

Pursuing ‘beyond compliance’ environmental, social and governance – ESG – is the stated sustainability commitment of the company, headed by CEO Cobus Loots. United Nations Global Compact principles are declared as the guiding lights of its sustainable community development.

On October 21, Pan African joined Harmony Gold, DRDGOLD, Gold Fields and AngloGold Ashanti on the Van Eck Gold Miners’ GDX index, a US-managed exchange-traded fund that seeks to replicate the price and yield performance of the New York Stock Exchange’s Arca Gold Miners Index, which is intended to track the overall performance of gold mining companies.

On October 3, the Mogale tailings retreatment operation was commissioned west of Johannesburg, less than an hour from Pan African’s corporate office in Rosebank. Mogale’s 1.1-million ounces of recoverable gold reserve was acquired for just over $1/oz. The R2.5-billion project came in below budget in 14 months.

Trading will commence in the new ordinary shares on or around December 10, with TCMG seen as representing an opportunity to diversify near-term low-cost production in the company’s next growth phase.

TCMG’s project encompasses 1 700 km², with holdings including the 100%-owned Warrego, Nobles, and Juno assets, as well as a joint venture with ASX-listed Emmerson Resources. The region, in Australia's Northern Territory, is described as being underexplored, with only 8% of drilled holes extending beyond a depth of 150 m.

Current mineral resources stand at eight-million ounces of gold and about 1.2-million tonnes of copper.

Confidence has been expressed that the TCMG acquisition will complement Pan African’s strategy of focusing on low-cost gold mining opportunities that have growth potential.

A completed compliant feasibility study points to mineral resources of 1.3-million ounces of gold and mineral reserves of 400 000 oz.

The projected financial performance includes a free cash flow of $420-million over the life-of-mine, assuming a gold price of $2 600/oz, with a net present value of $129.7-million and a real ungeared internal rate of return of 144% based on current reserves alone.

The project’s initial development capital of $35.7-million is fully funded, including debt facilities in Australia, with support from the Northern Territory government.

Construction of the processing plant is more than halfway complete, and commissioning is anticipated by June 2025, with the first gold pour expected the following month.

Over the initial three years of production, TCMG aims to produce about 50 000 oz/y of gold from surface stockpiles and tailings at an all-in sustaining cost of about $1 300/oz.

The project is expected to yield yearly production growth of about 20%. The Nobles gold project is set to commission in mid-2025, featuring an initial eight-year mine life with five years of current reserves and three years pending permit approvals. This processing facility will be the largest ever to operate in the region.