2016 Abridged Mineral Resource & Mineral Re...
Pan African Resources PLC
(Incorporated and registered in England and Wales under Companies Act 1985 with registered number 3937466 on 25 February 2000)
Share code on AIM: PAF
Share code on JSE: PAN
ISIN: GB0004300496
("Pan African Resources" or the "Company" or the "Group")
2016 Abridged Mineral Resource & Mineral Reserve Report
Pan African Resources, the African-focused precious metals producer, is pleased to announce that the 2016 Abridged Mineral Resource and Mineral Reserve Report ("MR&MR") has been released and is available on the Company's website at www.panafricanresources.com. A summary of the report, including the Group Mineral Resource and Mineral Reserve statement as at 30 June 2016, has been provided below.
Overview
- 3.0 million ounces (“Mozâ€) or 9.4% gross annual increase in Group gold resources to 34.9Moz (2015: 31.9Moz).
- 0.4Moz or 3.8% gross annual decrease in Group gold reserves to 10.0Moz (2015: 10.4Moz).
- No material change in Group platinum group elements (“PGEâ€) resource, 0.6Moz (2015: 0.6Moz).
- 0.3 Moz or 60% gross annual decrease in Group PGE reserves to 0.2Moz (2015: 0.5Moz). Following International Ferro Metals Limited (“IFMâ€) being placed in business rescue, the PGE mineral reserves at Phoenix Platinum declined year-on-year by 0.3Moz.
- 23.3 million tonnes (“Mtâ€) of mineable tonnage in situ coal from Uitkomst Colliery.
- Down dip extension of the high grade 11 Block of the main reef complex (“MRCâ€) orebody by a further 70 metres. This extension to the MRC orebody resulted in additional mineral reserves at Fairview Mine, thereby extending the life-of-mine (“LOMâ€) of Barberton Mines to 22 years.
- Positive grade/tonnage profile for the 25-26 levels at Evander No. 8 Shaft, thereby maintaining the LOM of Evander Mines to 16 years.
- Surface exploration drilling commenced at Evander Mines targeting the 2010 payshoot.
- Positive pre-feasibility study (“PFSâ€) of the Elikhulu tailings retreatment project (“Elikhulu Projectâ€), the Company mandated DRA Projects (Pty) Limited (“DRA Projectsâ€) to conduct a definitive feasibility study (“DFSâ€) on the project. This study will be completed by November 2016.
Gold
Group Gold Mineral Resources
The Group's attributable gold Mineral Resources increased from 31.9Moz in June 2015 to 34.9Moz in June 2016, equating to an annual increase of 3.0Moz, or 9.4%. This increase can be attributed to additional resources estimated for the Elikhulu Project at Evander Mines and a higher gold price used for the declaration of the Group’s gold Mineral Resource.
| As at 30 June 2016 | ||||||||||||
| Tonnes | Grade | Contained Gold | ||||||||||
| Category | (million) | (g/t) | Tonnes | Moz | ||||||||
| Mineral Resource | Measured | 6.6 | 10.27 | 67.8 | 2.2 | |||||||
| Indicated | 261.3 | 2.42 | 633.5 | 20.4 | ||||||||
| Inferred | 69.4 | 5.56 | 386.0 | 12.3 | ||||||||
| Pan African Resources | Total | 337.3 | 3.22 | 1 087.3 | 34.9 | |||||||
Group Gold Mineral Reserves
The Group's gold attributable Mineral Reserves decreased from 10.4Moz in June 2015 to 10.0Moz in June 2016 - an annual decrease of 0.4Moz, or 3.8%.
| As at 30 June 2016 | |||||||||||
| Tonnes | Grade | Contained Gold | |||||||||
| Category | (million) | (g/t) | Tonnes | Moz | |||||||
| Mineral Reserve | Proved | 5.0 | 7.78 | 38.8 | 1.3 | ||||||
| Probable | 77.3 | 3.51 | 271.8 | 8.7 | |||||||
| Pan African Resources | Total | 82.3 | 3.71 | 310.6 | 10.0 | ||||||
The decrease in the Group’s gold Mineral Reserve can be attributed to mining depletion for the year under review.
Platinum Group Elements
Group PGE Mineral Resources
The Group's attributable PGE Mineral Resources did not change materially for the year under review.
| As at 30 June 2016 | |||||||||||
| Tonnes | Grade | Contained PGE’s | |||||||||
| Category | (million) | (g/t) | Tonnes | Moz | |||||||
| Mineral Resource | Measured | 1.4 | 2.43 | 3.4 | 0.1 | ||||||
| Indicated | 1.3 | 2.65 | 3.4 | 0.1 | |||||||
| Inferred | 3.5 | 3.65 | 12.6 | 0.4 | |||||||
| Pan African Resources | Total | 6.2 | 3.16 | 19.0 | 0.6 | ||||||
Group PGE Mineral Reserves
The Group's attributable PGE Mineral Reserves decreased from 0.5Moz in June 2015 to 0.2Moz in June 2016 - an annual decrease of 0.3Moz or 60%. This decrease is attributed to the exclusion of the mineral reserves from the Lesedi Mine, current arisings. Following IFM being placed in business rescue, the PGE mineral reserve at Phoenix Platinum declined year on year.
| As at June 2016 | Tonnes | Grade | Contained PGE’s | ||||||||
| Category | (million) | (g/t) | Tonnes | Moz | |||||||
| Mineral Reserve | Proved | 1.4 | 2.43 | 3.4 | 0.1 | ||||||
| Probable | 1.3 | 2.65 | 3.4 | 0.1 | |||||||
| Pan African Resources | Total | 2.7 | 2.54 | 6.8 | 0.2 | ||||||
Coal
Group Coal Mineral Resources
The Group's attributable coal mineral resource was declared as 23.3Mt as at June 2016.
| Resources | Raw Coal Qualities (ad) | ||||||||
| Class | MTIS (Mt) | RD | IM (%) | Ash (%) | VM (%) | FC (%) | CV (MJ/kg) | TS (%) | |
| Measured | 15.0 | 1.50 | 2.5 | 23.5 | 24.3 | 49.8 | 24.75 | 1.23 | |
| Indicated | 4.3 | 1.51 | 2.5 | 23.8 | 23.9 | 49.8 | 24.62 | 1.14 | |
| Inferred | 4.0 | 1.50 | 2.4 | 23.4 | 23.4 | 50.9 | 25.02 | 1.03 | |
| Total | 23.3 | ||||||||
| Resources | 12% Ash Product | ||||||||
| Class | MTIS (Mt) | Yield (%) | IM (%) | Ash (%) | VM (%) | FC (%) | CV (MJ/kg) | TS (%) | |
| Measured | 15.0 | 73.9 | 2.7 | 12.0 | 28.0 | 57.3 | 28.96 | 0.96 | |
| Indicated | 4.3 | 76.2 | 2.8 | 12.0 | 27.5 | 57.8 | 29.00 | 0.97 | |
| Inferred | 4.0 | 80.1 | 2.6 | 12.0 | 26.6 | 58.9 | 29.22 | 0.92 | |
| Total | 23.3 | ||||||||
The abbreviations used in the above table are as follows:
MTIS: mineable tonnes in situ; RD: relative density; IM: inherent moisture; VM: volumetric moisture; FC: fixed carbon; CV: calorific value; and TS: total sulphur.
Group organic growth
Current exploration drilling as well as accessing and developing of our orebodies were maintained during the year. The strategy of converting Mineral Resource to Mineral Reserve was progressed by moving organic projects further up the mining value chain towards commissioning. The tables below reflect the progress of near-mine growth projects that have contributed ounces to the Mineral Resource for the year.
Group: Exploring the orebody - exploration drilling
| Operation | Total metres | No. of boreholes | Average channel width (cm) | No. of intersections above cut-off | Average grade (g/t) | Total expenditure (Rm) |
| Barberton Mines | 9 916 | 118 | 146 | 50 | 17.46 | 7.0 |
| Evander Mines | 567 | 9 | 27 | 1 | 16.20 | 0.6 |
Exploration drilling projects at Barberton Mines yielded positive results on all three operations (see table below).
At Fairview Mine, exploration drilling confirmed a further 70m down dip extension of the MRC orebody with a high-grade intersection of 125.80g/t over 680cm.
Recent borehole results are detailed below:
| Borehole number | Channel width cm |
Grade g/t |
| Fairview Bh 5951 | 680 | 125.80 |
| Sheba Bh SWR 15 | 100 | 28.90 |
| New Consort Bh 14L19 | 100 | 22.80 |
| New Consort Bh 33C2 | 100 | 17.00 |
Group: Accessing the orebody - on-reef development
| Operation | Total on-reef development (m) | Average grade (g/t) |
| Barberton Mines | 926 | 4.41 |
| Evander Mines | 330 | 41.59 |
Barberton Mines: Developing the orebody - capital ore reserve projects
| Project | Y/E 30 June 2016 (m) | Y/E 30 June 2015 (m) | Y/E 30 June 2014 (m) | Potential resource (oz) |
| Sheba – pillar development | 540 | 824 | 351 | 23 599 |
| Sheba – Edwin Bray to Thomas and Joe’s Luck area | 27 | 5 | 171 | 13 246 |
| Fairview – 11 Level Royal Reef | 0 (equipping old main shaft) | 0 (equipping old main shaft) | 0 | 17 000 |
| Fairview – 1# ore reserve opening | 131 | 84 | 154 | 14 821 |
| Fairview – No. 3 Shaft deepening | 64 | 26 | 0 | 1 600 |
| Fairview – 64-68 Level | 581 | 447 | 295 | 860 766 |
| Sheba Western Cross | 133 | 295 | 71 | 32 022 |
| Royal Sheba | 189 | 165 | 0 | 206 750 |
| Consort – 33-45PC | 387 | 258 | 193 | 10 000 |
| Consort – MMR pillar development | 0 | 0 | 173 | (new target area) |
| 8-3 # | 17 | 327 | 253 | 900 |
Evander Mines: Developing the orebody - capital ore reserve projects
| Project | Y/E 30 June 2016 (m) | Y/E 30 June 2015 (m) | Y/E 30 June 2014 (m) | Potential resource (oz) | |
| 2 Decline 24–25 Level | 356 | 904 | 686 | 1 200 000 | |
| 25 A block ventilation | 87 | 10 | 925 | ||
Group growth projects
Elikhulu
Following receipt of a positive PFS for the Elikhulu Project, the Company mandated DRA Projects to conduct a DFS on the project. The study will be available by November 2016, after which shareholders will be appraised.
In March 2016, SRK Consulting (South Africa) (Pty) Limited independently estimated the mineral resource of the Elikhulu Project at 178.7Mt @ 0.29g/t (1.7Moz).
2010 Payshoot
A surface exploration drilling programme was initiated during the year to define additional mineral resources for the 2010 payshoot. The 2010 payshoot is a secondary payshoot originating from the main Kinross payshoot and can be accessed from the No. 3 Decline at Evander No. 7 Shaft. Previous surface holes in this area delivered results up to 36.04g/t over a Kimberley reef width of 49cm. The potential mineral resource of the 2010 payshoot is estimated at 6.3Mt @ 10.82g/t (2.2Moz).
The Company’s current generic growth projects are summarised hereunder:
| Evander Mine Projects | Category | Tonnes (million) |
Grade (g/t |
Ounces (Moz) |
Depth below surface (m) |
| Elikhulu Project | Resource | 178.7 | 0.29 | 1.7 | on surface |
| 2010 Payshoot | Resource | 6.3 | 10.82 | 2.2 | 1 800 – 2 500 |
Reporting in compliance with SAMREC Code
To meet the requirement of the South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves ("SAMREC Code") that the material reported as a Mineral Resource should have "reasonable and realistic prospects for eventual economic extraction", Pan African Resources has determined an appropriate cut-off grade which has been applied to the quantified mineralised body. In determining the cut-off grade, Pan African Resources uses a gold price of R550 000/kg. At our underground mines, the optimal cut-off is defined as the lowest grade at which an orebody can be mined to maximise total profits, under a specified set of mining parameters. The Mineral Resource optimiser tool accordingly developed in-house was applied to the Mineral Resource inventory.
The optimiser programme requires the following inputs to convert the Mineral Resource to the Mineral Reserve:
- the on-mine database inventory of all mineral resource blocks;
- an assumed gold price - ZAR450 000/kg;
- planned production rates for each mine;
- mine call factor;
- plant recovery factors; and
- historical cash operating costs and other efficiency factors.
The Mineral Reserves represent that portion of the Measured and Indicated Mineral Resources above cut-off in the LOM plan and have been estimated after considering the modifying factors affecting extraction. A range of disciplines has been involved at each mine in the LOM planning process including geology, surveying, planning, mining engineering, rock engineering, metallurgy, financial management, human resources management and environmental management.
Note: Mineral Resources are inclusive of the Mineral Reserve, unless otherwise stated.
Rounding of numbers contained in this announcement may result in minor computational discrepancies.
Competent Person
The competent person for Pan African Resources, Mr Barry Naicker, the group Mineral Resource Manager, signs off the MR&MR for the Group and has reviewed and approved the information contained in this announcement in writing. He is a member of the South African Council for Scientific Professions (400234/10). Mr Naicker has 15 years of experience in economic geology and mineral resource management.
He is based at 1st Floor, The Firs, cnr. Cradock and Biermann Avenues, Rosebank, 2196, Gauteng.
Johannesburg
21 September 2016
Contact Information
Corporate Office
The Firs Office Building
1st Floor, Office 101
Cnr. Cradock and Biermann Avenues
Rosebank, Johannesburg
South Africa
Office: + 27 (0) 11 243 2900
Facsimile: + 27 (0) 11 880 1240
Registered Office
Suite 31
Second Floor
107 Cheapside
London
EC2V 6DN
United Kingdom
Office: + 44 (0) 207 796 8644
Facsimile: + 44 (0) 207 796 8645
| Cobus Loots | Deon Louw |
| Pan African Resources PLC | Pan African Resources PLC |
| Chief Executive Officer | Financial Director |
| Office: + 27 (0)11 243 2900 | Office: + 27 (0) 11 243 2900 |
| Phil Dexter | John Prior / Paul Gillam / James Black |
| St James's Corporate Services Limited | Numis Securities Limited |
| Company Secretary | Nominated Adviser & Joint Broker |
| Office: + 44 (0)207 796 8644 | Office: +44 (0)207 260 1000 |
| Sholto Simpson | Matthew Armitt / Ross Allister |
| One Capital | Peel Hunt LLP |
| JSE Sponsor | Joint Broker |
| Office: + 27 (0)11 550 5009 | Office: +44 (0)020 7418 8900 |
Jeffrey Couch / Neil Haycock / Thomas Rider
BMO Capital Markets Limited
Joint Broker
Office: +44 (0)20 7236 1010
| Julian Gwillim | Daniel Thöle |
| Aprio Strategic Communications | Bell Pottinger PR |
| Public & Investor Relations SA | Public & Investor Relations UK |
| Office: +27 (0)11 880 0037 | Office: + 44 (0)203 772 2500 |
www.panafricanresources.com
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