Pan African Resources has an interesting underground project that in another time would be a no-brainer to bring quickly into production. 
But it is constrained by the closure earlier in 2018 of its Evander underground mines with the loss of 1,635 jobs – and also by the loss of investors’ appetite for more deep-level mining at the company, which took a R1.78bn impairment against the asset.
There is, however, a high-grade block of ground that can be easily accessed from Evander’s 7 Shaft that was closed in May.
Pan African reckons the Egoli project could deliver 23,500oz of gold a year in the first four years of development, and then 79,000oz annually over the next seven years at an all-in sustaining cost of R300,000/kg.
While not putting a price tag on the entire project, peak funding would be R870m.
Pan African has just completed its R1.7bn Elikhulu tailings retreatment project at Evander and is keen to develop the Royal Sheba prospect at Barberton, which has the potential to be a profitable opencast mine with a very quick return on project capital.
So what’s to become of Egoli? Pan African CEO Cobus Loots suggests there could be a partnership to bring it into production. Finding a group willing to invest in an underground mining project in SA could be a challenge. There are scant new underground gold mining investments in SA so any success in attracting partners to this project would be a rare vote of confidence in the gold sector.