Pan African CEO Jan Nelson
Mar. 31, 2010 - JSE- and Aim-listed Pan African Resources announced a R53-million deal on Wednesday opening the way for it to acquire a position in a platinum-group-metals (PGM) producing chromite tailings retreatment plant (CTRP), located at Kroondal, on the Western Limb of the South Africa's Bushveld Complex.
The deal was concluded with Ivanhoe Nickel & Platinum, which would sell all the shares it holds in GB Mining UK Limited and RKR Mining to Pan African.
Through South African subsidiaries, the two companies together hold a 25% interest in the RK1 Consortium, which owns the CTRP. The other members of the RK1 Consortium are Aquarius Platinum (50%), which operates the facility, and Sylvania Resources (25%).
Should all conditions be met, Pan African would pay cash for the shares.
"This transaction not only brings PGM ounces to the group, but potentially unlocks further PGM growth opportunities," Pan African CEO Jan Nelson said, adding that the RK1 CTRP was a low-cost platinum operator with high margins, which fits well with the company's objectives.
The CTRP treats old dump material and current tailings streams derived from the beneficiation processes employed by nearby chromite mines.
It produced 6 824 oz of four PGMs including platinum (60,9%), palladium (21,9%), rhodium (16,9%) and gold (0,2%) at an average cost of $332/oz for the 12-month period ended June 30, 2009. The CTRP's profit before tax for the same period was about R3,1-million.
Production in 2009 was substantially lower that the 9 849 oz produced, at a cost of $360/oz, in 2008, which was reportedly attributable to variations in the supply of current tailings streams and the relocation of the reclamation facilities on the tailings dump.
Pan African said that it understood that significant progress had since been made in securing medium- and long-term tailings supply sources.
