viewPan African Resources plc

Pan African Resources more than doubles mineral resource estimate at Sheba after latest round of drilling

The AIM-listed miner now believes there could be 0.9mln ounces underfoot at Sheba although that figure could rise once again in November once all the drilling results are back

pan african workers
Sheba sits within the Barberton Mines licence – Pan African’s flagship gold project

Pan African Resources plc (LON:PAF) has more than doubled the mineral resource estimate at its Royal Sheba gold project in South Africa after results from the latest round of drilling “exceeded expectations”.

The AIM-quoted miner now thinks the orebody is host to 0.9mln ounces of gold – a 150% increase on its previous estimate of 0.36mln ounces.

READ: City broker Numis repeats ‘buy’ on Pan African

Drilling has suggested that around 0.35mln ounces of the precious metal are near to the surface and are conducive to open pit mining.

Open pit mining is generally a cheaper and easier process than underground mining, albeit with slightly lower grades. That isn’t the case at Sheba though, with the results suggesting the near-surface resource is of a slightly higher grade than that of the underground resource. Overall, Pan African estimates the grade at Sheba to by 3.27 grams per tonne.

Definitive feasibility study by end of February

“The exploration results from the drilling on Royal Sheba have exceeded our expectations, reaffirming the grades historically mined at depth,” said chief executive Cobus Loots.

“Significantly, the drilling programme has indicated the orebody extends to surface, with the potential to establish a new open pit mining operation in the short term, transitioning to an underground mining operation only after a number of years.

He added: “Royal Sheba’s opencast orebody has the potential to increase production from our flagship Barberton operations at a very competitive cost, aligned with our strategic positioning as a low-cost gold producer.”

More drilling planned

Another 15 holes are planned to be drilled as part of this current exploration programme, after which another mineral resource estimate is expected to be given, likely in November.

Shortly after, Pan African expects to undertake a definitive feasibility study which is scheduled for completion in February 2019.

Shares were up 2.1% to 7.7p in early deals on Thursday.

Quick facts: Pan African Resources plc

Price: 22.1 GBX

Market: AIM
Market Cap: £426.16 m

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events


The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

In exchange for publishing services rendered by the Company on behalf of Pan African Resources plc named herein, including the promotion by the Company of Pan African Resources plc in any Content on the Site, the...


Pan African should be debt-free this year and hopes to increase dividends as...

Pan African Resources plc's (LON:PAF) Cobus Loots tells Proactive its gold production increased by 4.1% in the year ended June 2020. Loots says the strategic focus for the year ahead remains on optimising operations and de-gearing the balance sheet with the intention of increasing dividends in...

on 17/7/20

2 min read