JOHANNESBURG (miningweekly.com) – The Soweto Cluster definitive feasibility study (DFS) is on track for completion this month, Pan African Resources reported on Monday, June 1 in an operational update ahead of its financial year ending June 30 to highlight its 40% increase in annual gold production to 275 000 oz.

The option to construct a new 600 000-t-a-month tailings processing facility next to the London- and Johannesburg-listed company’s thriving Mogale Tailings Retreatment (MTR) surface gold operations west of Johannesburg, is the focus of the Soweto Cluster DFS.

Envisaged is a standalone operation producing 30 000 oz to 35 000 oz a year for 15 years.

Pan African, headed by CEO Cobus Loots, has achieved improved safety statistics as it continues to concentrate on safety initiatives amid MTR contributing to a 14% higher half-year gold output of 147 000 oz, along with excellent production performances from the Elikhulu Tailings Retreatment Plant as well as the Evander and Barberton underground operations, which offset slower-than-anticipated ramp-up of production from Tennant Mines, the company’s acquisition in Australia.

Initiatives to expand annual gold output to 300 000 oz and beyond are under way.

On the cost front, all-in sustaining cost (AISC) guidance of $1 870/oz is expected against a background of record operating cash flow generation, projected cash of $220-million, and domestic medium-term notes of $49.7-million being the only outstanding debt.

AISC estimates allow for above inflation increases for reagents, electricity and other key inputs at a time when the company has never been in a stronger financial position, atop major growth investments and dividends to shareholders.

Further production increases are expected in later years, primarily driven by production growth from Tennant and MTR, where environmental approvals and processing of water use licence applications for the Soweto Cluster are in progress. The required pipeline servitudes from the Soweto Cluster tailings storage facilities to the Mogale plant site are being concluded and the study for the expansion of the Mogale plant to include a separate circuit for the treatment of hard rock ore from local surface material is being finalised. The treatment of the hard rock ore could potentially further increase the Mogale complex’s production by 20 000 oz to 30 000 oz a year.

“The strong operational performance from our South African portfolio offset the slower-than-anticipated production ramp-up from Tennant. In the next financial year, we expect a much-improved performance from Tennant, with a full year of mining from the high-grade White Devil deposit, and a clear pathway to growing Australian gold production to 100 000 oz/y in the next three years. In addition, we anticipate increasing gold production from MTR in the next years, with the Soweto Cluster DFS now nearing completion,” Loots stated in a release to Mining Weekly.

“Despite inflationary pressures, costs remain well managed. We’re in a fortunate position in South Africa, with stable grid power to all our operations, and an accelerating renewable energy portfolio being rolled out to maintain this supply and reduce the impact of Eskom cost increases.

“In Australia, while diesel price increases have had an impact on production costs, sufficient storage facilities are now in place to minimise risks associated with potential fuel supply shortages. We are also investing in a large renewable energy solution for Tennant Mines, which will include battery storage, to reduce future operating costs.

“The conclusion of the Emmerson transaction will see Pan African consolidate the Tennant Creek goldfield, and we look forward to welcoming the Emmerson shareholders onto our register as we also complete our listing on the Australian Stock Exchange, subject to the implementation of the transaction.

“We also look forward to reporting our final results for the year ended June 30 on or about 16 September 2026, where additional details on progress with our growth projects and ESG initiatives will be presented,” Loots added.

Elikhulu, where half-year production is estimated at 27 000 oz, is reportedly on track to realise gold production of more than 56 500 oz for the 12 months to June 30.

Barberton Tailings Retreatment Plant (BTRP) in Mpumalanga is expected to achieve full-year production of 13 000 oz, down on last year’s 15 224 oz but in line with the mine plan. The addition of a flotation circuit to improve recoveries, which has been approved at a cost of $5.9-million, will also enable the BTRP to treat refractory ore types in future. Studies are underway for the installation of a crusher circuit at the BTRP to allow hard rock from Royal Sheba to be processed.

UNDERGROUND OPERATIONS

Second-half gold production at Evander Mines’ underground complex in Mpumalanga is estimated at 25 000 oz, a 16% increase on first-half production to December 31. Production of 47 000 oz anticipated for the full year would be a 68% increase year-on-year.

Evander Mines’ 8 Shaft average recovered grade increasing to more than 11 g/t in this financial year compared with 6.8 g/t in the corresponding previous period contributed, as development advanced to the adjacent 24 Level A-Raise line with persistent high-grade mineralisation. These two raise lines will continue to yield the bulk of the ore tonnage to be processed at Evander Mines in financial year 2027.

Development on the 25 Level access haulage is progressing according to plan and more sourcing of third-party surface material treated through a dedicated circuit within Evander Mines’ Kinross metallurgical plant will yield about 3 000 oz gold.

Second-half production of 39 500 oz expected for the Barberton Mines underground operations is poised to elevate full-year production to a 5%-higher 72 000 oz.

CAPITAL EXPENDITURE

Total capex for the 12 months to June 30, forecast at $180-million, includes $10-million for expedited development of the White Devil deposit at Tennant Mines, $8-million to construct the solar plant at Tennant Mines, and $3-million to finalise feasibility studies for the Soweto Cluster DFS.

Several initiatives are being expedited to grow gold production further and reduce AISC over the next years. The group’s capex guidance for the 2027 financial year has been revised up to $324-million, compared with the previously guided $267-million.

This increase is to expedite the development of the White Devil opencast mine as well as the installation of a fixed crusher circuit and filter belt at the Nobles plant to support current and future production growth, as well as fast-tracking exploration.

Additionally, construction costs for the renewable energy projects have also been finalised and included in the revised capex.

CONTINGENCY PLANNING

In light of the continuing unrest in the Middle East, a rolling three-month supply of cyanide at all South African operations has been secured and one-month on-site storage of diesel fuel reserves at Tennant.

EXPLORATION

The exploration strategy continues to be focused on converting inferred mineral resources into mineral reserves, identifying extensions at known deposits at Tennant, and drill testing new targets.

Key activities include 6 000 soil samples across up to 13 anomalous targets, as well as diamond and reverse circulation drilling programmes at Chariot, Golden Forty, Juno and White Devil.

AUSTRALIAN LISTING

The acquisition of Emmerson consolidates Pan African’s position in the prospective Tennant Creek mineral field in Australia’s Northern Territory. The successful conclusion of the transaction will deliver 100% ownership and eliminate the complexity of the existing joint venture arrangements. As part of the transaction, Pan African will undertake an Australian Securities Exchange (ASX) listing.

Meanwhile, the 15% investment in ASX-listed CuFe for A$15.35-million centres on the synergies of CuFe’s Gecko and Orlando projects with the Pan African’s Warrego project, Tennant Creek’s largest copper and gold resource. CuFe has committed to the formation of a technical working group, comprising representatives of Pan African, to investigate potential synergistic benefits associated with the development of these projects.