REG-Pan African Resources Plc: Completion of Feasibility Study on Soweto Cluster Tailings Storage Facilities

Pan African ResourcesAnnouncement

Today 07:02

Pan African Resources PLC  (Incorporated and registered in England and Wales under the Companies Act 1985 with registered number 3937466 on 25 February 2000)  Share code on LSE: PAF  Share code on JSE: PAN  ISIN: GB0004300496  ADR ticker code: PAFRY  (“Pan African Resources” or the “Company” or the “Group”)              Pan African Resources Funding Company Limited  Incorporated in the Republic of South Africa with limited liability  Registration number: 2012/021237/06  Alpha code: PARI  

COMPLETION OF FEASIBILITY STUDY ON SOWETO CLUSTER TAILINGS STORAGE FACILITIES
(SOWETO TSFs) DEFINES A PATHWAY TO SIGNIFICANT PRODUCTION GROWTH FROM THE
MOGALE TAILINGS RETREATMENT (MTR) COMPLEX, WITH SHORT-TERM EXPANSION PROJECT
TO INCREASE GOLD PRODUCTION FROM 50,000OZ/YR TO 60,000OZ/YR TO BE COMPLETED
DURING DECEMBER 2025

 

Pan African is pleased to advise shareholders and noteholders that the Company
has completed a feasibility study (the “study”) to process the Group’s
Soweto TSFs, which were acquired by the Group in 2021 as part of the Mintails
SA transaction. The Soweto TSFs contain Mineral Reserves of 108Mt at 0.28g/t
for 0.98Moz of gold.

As part of the study, two strategic options were evaluated, namely:
*            A 1 Million tonne per month (Mtpm) standalone carbon in leach
(CIL) plant, for which a definitive feasibility study (DFS) was completed; and
         
*            A 600,000 tonnes per month (tpm) expansion circuit to be added to
the existing MTR operation, for which the study was completed to a
prefeasibility study (PFS) level.
The integrated 600ktpm Soweto Tailings Retreatment (STR) circuit at MTR was
identified as the preferred option due to a significantly lower upfront
capital requirement, a shorter construction period, reduced permitting
obligations and superior financial returns. This option will also benefit from
synergies with the existing MTR plant and operational infrastructure. The DFS
for this option is expected to be completed by June 2026, with a final board
decision to commence project construction shortly thereafter, subject to the
considerations outlined below.

Separately, the Company continues to optimise operations at MTR, with the
expansion of its production capacity from ~50koz/yr to ~60koz/yr to be
completed in the next month.

PREFERRED OPTION PFS HIGHLIGHTS
*            Addition of a 600ktpm module at MTR, to be partly integrated into
the existing operation, with standalone feed from the Soweto TSFs          
*            Anticipated construction period of approximately 24 months       
  
*            Capital cost of ~US$160 million (approximately ZAR2.8 billion (at
an average exchange rate of US$/ZAR:17.50)), which includes remining and
overland pumping infrastructure and expanded TSFs          
*            Expected annual gold production of 30-35koz for approximately 15
years at an all-in-sustaining-cost (AISC) of between US$1,000/oz and
US$1,200/oz          
*            Utilising a gold price of US$2800/oz the project returns:        
  *              A post-tax net present value (NPV)             13.3          
   of US$ 129.7 million (ZAR2,270m)            
*              A real ungeared internal rate of return (IRR) of 29.4%         
  
*              Payback in 3 years post-commissioning            
          
*            Utilising a gold price of US$3500/oz the project returns:        
  *              A post-tax NPV             13.3              of US$ 235.4
million (ZAR4,120m)            
*              A real ungeared IRR of 40.2%            
*              Payback in 2 years post-commissioning
 

Pan African Resources CEO Cobus Loots commented:                      “The
successful commissioning of the MTR operation in October 2024, completed ahead
of schedule and under budget, again demonstrated Pan African’s ability with
regards to successfully commissioning tailings retreatment operations. We
continue to optimise operations at MTR, with the expansion of its production
capacity from ~50koz/yr to ~60koz/yr to be completed in the next month. The
addition of the STR circuit would further increase annual production from the
MTR complex to almost 100,000oz/yr and leverage operational synergies to
reduce the complex’s very competitive AISC even further.

Subject to the DFS and final board approval, the STR circuit would fast track
the remining of the Soweto Assets and also environmental rehabilitation
programmes, positively impacting our local communities in the area.”

ENVIRONMENTAL AND PERMITTING

The Environmental Impact Assessment and Water Use Licence processes are
progressing in accordance with the project schedule, with approvals expected
by June 2026.

GROUP DEGEARING PROFILE AND ANTICIPATED PROJECT FUNDING

Given the prevailing high gold prices, the Group is now on track to be fully
de-geared from a net debt perspective by February 2026.                     
This is despite the payment of a record dividend to shareholders in December
2025.

The Group’s robust financial position and cashflow generation profile
provides strategic flexibility in terms of funding the STR circuit, and
proposals have already been received from financial institutions in this
regard.

ESG/SOCIAL IMPACT

The MTR operation commenced with concurrent rehabilitation programmes during
its construction phase and has achieved significant milestones to date, with
the successful re-establishment of wetlands and improved air and water
quality. This has positively impacted local communities in the area as well as
the Mogale region. The construction of the STR circuit will bring forward the
original Soweto Cluster TSFs remining schedule.

 

Independent engineering studies on the Soweto TSFs have confirmed the
stability of the facilities, with no identified failure risks that would
endanger surrounding communities. The Company maintains the clearing of silted
drainage channels around affected TSFs to confine the overflow of excess
rainwater to dedicated evaporation ponds, eradicating the run-off that
previously affected natural water systems. Pan African has also commenced with
the application of a newly developed binding agent that has reduced the amount
of airborne particulate matter during windy conditions, which will measurably
improve the air quality in the area.           

 

COMPETENT PERSON

 

The competent person for Pan African Resources, Hendrik Pretorius, the
executive for technical services and new business, signs off the Mineral
Resources and Mineral Reserves for the Group. He is a member of the South
African Council for Natural Scientific Professions (SACNASP 400051/11 –
Management Enterprise Building, Mark Shuttleworth Street, Innovation Hub,
Pretoria, Gauteng Province, South Africa), as well as a fellow in good
standing of the Geological Society of South Africa (GSSA – CSIR Mining
Precinct, Corner Rustenburg and Carlow Roads, Melville, Gauteng Province,
South Africa). Hendrik has 22 years' experience in economic geology, mineral
resource management (MRM) and mining (surface mining and shallow to ultra-deep
underground mining). He is based at The Firs Office Building, 2nd Floor,
Office 204, Corner Cradock and Biermann Avenues, Rosebank, Johannesburg, South
Africa. He holds a BSc (Hons) degree in Geology from the University of
Johannesburg as well as a Graduate Diploma in Mining Engineering from the
University of the Witwatersrand. Hendrik has reviewed, and approved, in
writing, the information contained in this document as it pertains to Mineral
Resources and Mineral Reserves.

 

The information contained in this announcement is the responsibility of the
Company’s board of directors and has not been reviewed or reported on by the
Group’s external auditors.

 

 

Johannesburg

 

27 November 2025

 

For further information on Pan African, please visit the Company's website at

www.panafricanresources.com

 

 Corporate information                                                                                                                                                                                                                                                                                                               
 Corporate Office   The Firs Building  2nd Floor, Office 204  Corner Cradock and Biermann Avenues  Rosebank, Johannesburg  South Africa  Office: + 27 (0)11 243 2900   info@paf.co.za  Registered Office   107 Cheapside, 2 nd Floor  London, EC2V 6DN  United Kingdom  Office: + 44 (0)20 3869 0706     jane.kirton@corpserv.co.uk  
 Chief Executive Officer     Cobus Loots   Office: + 27 (0)11 243 2900                                                                                                                 Financial Director and debt officer   Marileen Kok  Office: + 27 (0)11 243 2900                                                               
 Head: Investor Relations   Hethen Hira                                                                                                                                                Website:  www.panafricanresources.com                                                                                                         
  Tel: + 27 (0)11 243 2900                                                                                                                                                                                                                                                                                                           
  E-mail:  hhira@paf.co.za                                                                                                                                                                                                                                                                                                           
 Company Secretary   Jane Kirton   St James's Corporate Services Limited   Office: + 44 (0)20 3869 0706                                                                                Nominated Adviser and Joint Broker   Ross Allister/Georgia Langoulant   Peel Hunt LLP   Office: +44 (0)20 7418 8900                           
 JSE Sponsor & JSE Debt Sponsor   Ciska Kloppers   Questco Corporate Advisory Proprietary Limited   Office: + 27 (0) 63 482 3802                                                       Joint Broker   Thomas Rider/Nick Macann   BMO Capital Markets Limited   Office: +44 (0)20 7236 1010                                           
                                                                                                                                                                                       Joint Broker   Matthew Armitt/Jennifer Lee   Joh. Berenberg, Gossler & Co KG (Berenberg)   Office: +44 (0)20 3207 7800                        

 

 



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