Jan Nelson.  Picture: FINANCIAL MAIL
Jan Nelson. Picture: FINANCIAL MAIL

PAN African Resources will assume control of Evander Gold Mines on February 28, having obtained the consent required under Section 11 of the Mineral and Petroleum Resources Development Act, the last outstanding condition for the deal.

The R1.5bn purchase of Evander will double Pan African’s gold output to about 200,000oz.

Pan African CEO Jan Nelson said on Friday: "We are delighted to finally take full control of Evander. A world-class ore body and exceptional team of people will ensure that Pan African continues to deliver profitable, sustainable stakeholder growth.

"In addition to the 100,000oz of annual gold production, Evander also provides Pan African with a project pipeline that provides for significant growth possibilities and flexibility."

Harmony CEO Graham Briggs said: "The proceeds from the Evander sale further strengthen Harmony’s cash position. We are leaving Evander in the hands of a capable management team, who we believe will run the mine in a sustainable manner."

Pan African also has plans to set up a tailings treatment operation at Evander, where there is 202-million tons of material, and said this week that it would take a proposal to the board in June.

The project, expected to cost about the same as the R305m Bramber tailings operation to be commissioned in July, will add 20,000oz to 30,000oz of gold to Pan African.

Mr Nelson said this week that the cash cost at Bramber was expected to be lower than R200 a ton, compared with R1,800 a ton at its underground mines.

Evander had a reserve of 9-million ounces and an extremely high-grade ore body, he said in an interview with Summit TV this week, and Pan African was eyeing a number of potential organic projects.

Aside from the tailings project, he said, "we are looking at ore bodies at Evander Seven and Evander Nine Shaft. These are not projects with long lead times and high capital requirements."