The AIM-listed firm said it will acquire Mogale Gold Proprietary Limited and Mintails SA Soweto Cluster Proprietary Limited (MSC) for a maximum cash consideration of 50mln South African Rand (£2.42mln). Both firms are currently owned by Mintails Mining SA Proprietary Limited, which was placed into provisional liquidation in 2018.
The two companies comprise historic tailings storage facilities that contain an estimated 243mln tonnes of tailings with an in-situ grade of 0.3 grams per tonne (g/t) of gold for an estimated gold content of 2.36mln ounces.
The proposed transactions are conditional on due diligence and feasibility studies over a period of six to nine months, Pan African said, adding that it has successfully executed its strategy of “producing gold safely from low-cost operations and diversifying its operations to include both underground and low-risk surface operations”.
“The opportunity to acquire these surface resources complements our strategy of focusing on safe, low cost gold mining opportunities, with the potential to further grow our business by developing projects that meet our stringent investment criteria”, chief executive Cobus Loots said in a statement.
Pan African shares were up 4% at 23.4p in early afternoon trading.