Gold mining company Pan African Resources has reported “encouraging” results from its drilling programme at a tailings dam at Barberton Mines in South Africa.
The drilling, on the Bramber tailings dam, revealed a resource of 148,000oz at a grade of 1.47g per ton in situ—a relatively high grade for a tailings dam.
The dam, which has been used as a tailings storage facility since 1986, reached the end of its operational life in January 2011. Due to current high gold prices and the relatively low cost of the re-treatment of tailings dams, Pan African decided to carry out a drilling programme to evaluate the dam as a source of additional production ounces.
If feasible, a new carbon-in-leach processing plant will be constructed to treat 1.2 million tons per annum of tailings for three years, the company said. With construction estimated to take 12 months, the cost of the new plant is likely to be in the region of R120 million (approximately £11 million).
The company is now drilling another nine million tons of tailings which could extend the life of the project from approximately three to 10 years; and increase annual production by approximately 20koz. The drilling programme and metallurgical test work related to the expansion is expected to be completed within three months.
Jan Nelson, chief executive officer of Pan African, commented: "We are very encouraged by these results that show that the re-treatment of tailings at Barberton Mines is developing into a significant stand alone gold project. Not only could it increase the current production profile of the company by 20koz per annum but also increase the operating margin and reduce unit costs.
“The project at a 10 per cent real discount rate yields a net present value of approximately R350 million with an internal rate of return of approximately 85 per cent assuming a gold price of R300,000/kg. We continue to focus on organic growth opportunities within the group to grow our earnings."
