LAST month’s R1.5bn purchase of Evander gold mine will be a company changer for Pan African Resources, giving it more projects than it can bring into production itself and prompting it to search abroad for potential partners.
The acquisition of Evander and its staff of 2,500 doubles Pan African’s production at a stroke to 200,000oz, adding to the Barberton mine where the company is building a tailings treatment project that will be commissioned in the middle of next year.
The 10 shafts that make up the mines in Evander, including the now-defunct Winkelhaak, Kinross and Leslie mines, have produced 48-million ounces of gold since 1955 at an average grade of 7.2g a ton. Management at the mine, led by Evander’s GM, Manny da Silva, believes there is a lot of mining left in the basin where there are half a dozen projects waiting for Pan African.
One of the big debates between mine management and new owners Pan African is which projects to prioritise and how best to unlock them. They include a mini-tailing project, a bigger version of the project, revisiting two old shafts as well as three untouched mining areas.
Pan African CEO Jan Nelson has said he is talking to potential investors for the unexploited Evander South and Poplar projects, which will need new shafts and infrastructure. Another project area is Rolspruit, immediately contiguous to the area being developed for mining at number 8 shaft, but riven by faults and deeper than the new areas at about 2.5km below surface.
Rolspruit is the deepest part of the basin and the payshoot being mined extends into it. Evander is looking at mining as much of Rolspruit as it can from existing infrastructure.
"In Harmony, although we had become one of the cows giving the milk, we didn’t feature in its future," Mr da Silva said.
"We’ve got all this potential that can be unlocked now, that’s why I’m so excited.
"Pan African is looking at all of this very differently and see all this potential as growth points. Their views and our views, as management, are the same."
Harmony invested R250m in refrigeration at number 8 shaft to cool the bottom of the mine as well as putting in a new decline to tap into a high-grade payshoot 2.5km below surface.
Mr da Silva said Evander had repaid Harmony the money and was on track to generate sizeable cash flows in the coming years.