REG-Pan African Resources Plc: Gold Exploration Programme in Sudan

Pan African ResourcesAnnouncement

14/03/2022 07:00

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 AIM: PAF

Share code on JSE: PAN

ISIN: GB0004300496

ADR ticker code: PAFRY

(“Pan African” or the “Company” or the “Group”)

PAN AFRICAN RESOURCES INITIATES GOLD EXPLORATION PROGRAMME IN THE REPUBLIC OF
THE SUDAN

Pan African is pleased to advise shareholders that the Group has secured five
prospecting concessions (or exploration licences) in north-eastern Sudan (the
Block 12 concessions), covering an area of almost 1,100km(2) and located
approximately 70km northwest of Port Sudan. The Group was awarded the licences
by Sudan’s Ministry of Minerals for a period of three years, with the option
to renew for a further two years.

Further details on the Block 12 concessions are as follows:
* Exploration rights to five individual highly prospective areas were obtained
in the Arabian-Nubian Shield (ANS) and more specifically the Nakasib Suture
Zone (NSZ). These blocks comprise Block 12A and B (394km(2)); Block 12D
(189km(2)); Block 12E (298km(2)) and Block 12K (200km(2))  
* The concessions are located within close proximity to Port Sudan, a regional
trading and shipping hub
* Block 12 and the regional area contains a large number of artisanal workings
and gold tolling operations
* 14 rock samples obtained during site reconnaissance yielded an average grade
of 13.6g/t, as depicted in the table below:
 Sample ID  Type  Lithology    Au (g/t)  
 I8201      Rock  Quartz vein        0.1 
 I8202      Rock  Quartz vein        1.2 
 I8203      Rock  Phyllite           0.2 
 I8204      Rock  Quartz vein        0.9 
 I8205      Rock  Quartz vein        0.0 
 I8206      Rock  Quartz vein      <0.01 
 I8207      Rock  Quartz vein        2.1 
 I8208      Rock  Quartz vein        3.4 
 I8209      Rock  Quartz vein        0.3 
 I8210      Rock  Quartz vein        1.8 
 I8211      Rock  Quartz vein      145.0 
 I8212      Rock  Quartz vein       32.5 
 I8213      Rock  Diorite            2.2 
 I8214      Rock  Mud                0.6 
            Average                 13.6 
* Exploration spend will be phased, with limited expenditure of approximately
US$2.5m expected to be incurred during the 2022 financial year.
Block 12 and the Exploration Programme

The Block 12 concession areas were selected following a detailed due diligence
analysis by Pan African’s technical team, which included site reconnaissance
visits in Sudan and detailed desktop studies, which were used to inform the
Company’s exploration strategy.

Ten initial target areas have been identified for further exploration, based
on the size, extent of artisanal workings, presence of alluvial workings and
associated tailings, prospectivity and upside potential. Block 12 is located
on the same suture zone as the Hassai Gold Mine, which is the largest gold
producer in Sudan, with historic production of some 0.1 Moz per year. On 31
December 2011, the previous operators of the Hassai Gold Mine reported Proven
and Probable Mineral Reserves of 5.5Mt grading 2.3g/t, with Measured and
Indicated Mineral Resources of 6.5Mt, grading 2.5g/t and Inferred Mineral
Resources of 2.8Mt, grading 2.8g/t.

The Company’s concession areas are sparsely populated and arid, with rugged
topography in places, varying between 100m and 1,750m above sea level. Block
12 has undergone limited modern exploration in the past, which consisted
mainly of soil and grab samples, channel sampling and trenching on a few
targets, and shallow drilling.

Exploration activities in Sudan are expected to commence in the second
calendar quarter of 2022 to verify the results for the initial identified
targets and endeavour to identify additional targets. The Group has embarked
on a phased approach for its exploration work programmes, with the budgeted
expenditure allocated for the first financial year estimated at US$2.5
million. 

Geology and mineralisation

Block 12 is located within the ANS, where gold has been mined for over 5,000
years. The ANS formed during the Pan African orogeny that occurred between 500
million and 900 million years ago (Ma) and consists of a number of terrains
that are separated by suture zones which are represented by wide shear zones.
Pan African’s concession area straddles the NSZ, a structure that is host to
the Hassai Gold Mine, which exploits a number of Volcanogenic Massive Sulphide
(VMS) deposits and quartz veins. The area is dominantly underlain by
metamorphosed volcanic and volcaniclastic rocks, as well as a number of
intrusive phases including syn-orogenic diorites and late-stage orogenic
granite.

Numerous styles of gold mineralisation have been identified in the concession
areas, including:

1. Alluvial/placer gold:

These deposits are currently being worked by artisanal miners as the gold is
easily extracted from the alluvial sands, having been liberated from in situ
gold veins by mechanical breakdown from weathering.

2. Orogenic gold and VMS:

This orogenic gold mineralisation is associated with narrow, sub-vertical
quartz veins (typically 10cm to 100cm wide) and may extend for tens or even
hundreds of metres. Gold values are reportedly high and crushing and panning
operations observed in the field confirm these reports. Three principle
mineralised trends have been identified in the concession areas, where the
quartz vein sets form as a number of widely spaced individual veins that would
lend themselves to shallow underground mining, while the broader mineralised
zones observed may represent potential open-cast targets.

The gold associated with VMS deposits, including at the Hassai Gold Mine, is
predominantly stratiform accumulations of sulphide minerals that precipitated
from hydrothermal fluids on or below the seafloor in a wide range of ancient
and modern geological settings.

About Sudan

Sudan produced approximately 90 tonnes of gold in 2021, making it the third
largest gold producer in Africa after Ghana and South Africa, and the tenth
largest producer in the world with production in 2021 – equivalent to
Peru’s gold production.

Despite the recent political unrest in Sudan’s capital city of Khartoum,
mining producers and developers have been able to continue operating
uninterrupted in the country.    

Cobus Loots, Pan African’s CEO commented: “Our management team has been
visiting Sudan for the last two years to identify prospective gold mining
sites. We believe that the Block 12 concessions are highly prospective, and we
look forward to reporting exploration results from these properties in due
course. Our exploration programme will be phased, with expenditure of
approximately US$7m expected to be incurred during the first three years, to
ensure we limit the Group’s financial risk. Furthermore, before making any
material investment decisions we would need to be comfortable with the
country’s operating environment.   

Recently announced investments in Sudan by other international mining
companies, including Perseus Mining’s recently announced US$155 million
acquisition of Orca Gold, validates our views on the region’s prospectivity
for gold exploration and mining.

In the medium to longer term, these Sudanese exploration activities have the
potential to further add production growth to Pan African’s already
impressive project pipeline.”

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

Rosebank

14 March 2022

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

www.panafricanresources.com

 Corporate information                                                                                                                                                                                                                                                                                    
 Corporate office The Firs Office 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 Suite 31 Second Floor 107 Cheapside London EC2V 6DN United Kingdom Office: + 44 (0) 20 7796 8644  
 Chief executive officer  Cobus Loots Office: + 27 (0) 11 243 2900                                                                                                                    Financial director Deon Louw Office: + 27 (0) 11 243 2900                                                           
 Head: Investor relations  Hethen Hira Tel: + 27 (0)11 243 2900 E-mail: hhira@paf.co.za                                                                                               Website: www.panafricanresources.com                                                                                
 Company secretary Phil Dexter/Jane Kirton  St James's Corporate Services Limited Office: + 44 (0) 20 7796 8644                                                                       Nominated Adviser and Joint Broker Ross Allister/Alexander Allen  Peel Hunt LLP Office: +44 (0) 20 7418 8900        
 JSE Sponsor Ciska Kloppers  Questco Corporate Advisory Proprietary Limited Office: + 27 (0) 11 011 9200                                                                              Joint Broker Thomas Rider/Nick Macann  BMO Capital Markets Limited Office: +44 (0) 20 7236 1010                     



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