Pan African Resources and Wits Gold have joined forces to acquire the Evander Gold Mine from Harmony Gold for R1.7 billion.
The Evander operations are located in Mpumalanga, South Africa, and comprise the operating Evander 8 shaft and several significant development projects: Rolspruit, Poplar, Evander South, Libra and the Kinross metallurgical processing plant. Evander 8 currently has an expected life of mine of more than 10 years.
Evander is expected to produce between 85,000 and 95,000 ounces per annum. Pan African said the transaction will add significantly to its reserve and resource base, and provides an annual attributable share of production of approximately 45,000 ounces per annum, presenting an opportunity for the company to materially increase its gold production profile from 95,000 to approximately 140,000 ounces per annum. The deal will also provide Pan African with a significant project pipeline for future growth.
The acquisition will result in Wits Gold becoming South Africa's newest gold producer.
The consortium established to manage the project will benefit from Pan African's specialist operational skill set and from Wits Gold's specialist exploration expertise, as well as the mining experience of both companies' CEOs. The consortium will jointly control and manage the operations via a steering committee, with equal representation from both companies.
Commenting on the deal, CEO of Pan African Jan Nelson commented: "Evander meets our investment criteria in all aspects and has the same ability to yield high margins as our Barberton mining operations. The Evander 8 Shaft orebody has gold grades in excess of 14g /t in the measured and indicated resource category, an extremely experienced management team and workforce, as well as good infrastructure.”
He continued: “Many of our management team have been involved with the asset in the past and so we know it well. The smart solution of a partnership with Wits Gold gives us the necessary momentum to continue to deliver profitable sustainable stakeholder growth and returns and represents a first in the junior gold sector in South Africa.”
Pan African is a Johannesburg-based precious metals mining group producing approximately 100,000 ounces of gold and 12,000 ounces of platinum group metals per annum.
Wits Gold, also based in Johannesburg, is a gold and uranium company which holds 14 new order prospecting rights over a 1,195 square kilometre area in the southern Free State, Potchefstroom and Klerksdorp goldfields of the Witwatersrand Basin.
