Pan African Resources plc (LON:PAF) is selling its Phoenix Platinum subsidiary to Sylvania Resources Limited (LON:SLP) for a total cash consideration of 89mln rand (£5.21mln).
In a statement, the AIM-listed firm said the disposal will allow it to focus on its existing gold operations, construction of the Elikhulu tailings retreatment project and “other organic and acquisitive growth opportunities”.
READ: Pan African Resources recovers its poise, production guided at 190,000 ounces of gold this year
The company said the cash proceeds will further strengthen the group‘s financial position and supplement its existing cash resources and debt facilities.
Cobus Loots, Pan African’s chief executive officer commented: “The disposal of Phoenix Platinum, which for some time has been non-core to Pan African, enables us to further strengthen our financial position and to focus on our large gold operations and the construction of the Elikhulu project.”
The transaction is expected to be finalised within a 90-day timeframe.
Earlier this month, Pan African Resources said it had produced 173,000 ounces of gold in the year to June 2017, slightly lower than guidance.
In an update, the group said a slower restart at its Evander mine, after operations were halted earlier in the year and operational challenges at the Barberton mine, now remedied, were behind the guidance miss.
For the current financial year the company said it expects to produce in excess of 190,000 ounces of gold.