Pan African Resources PLC (AIM:PAF, OTCQX:PAFRY, JSE:PAN, OTCQX:PAFRF) has secured five prospecting concessions in north-eastern Sudan.
These cover an area of almost 1,100 square kilometres located approximately 70 kilometres northwest of Port Sudan, the company said in a statement.
Pan African 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.
Block 12 and the regional area contains a large number of artisanal workings and gold tolling operations.
During site reconnaissance, 14 rock samples that were obtained yielded an average grade of 13.6 grams per tonne gold.
Ten initial target areas have been identified for exploration, based on the size, extent of artisanal workings, presence of alluvial workings and associated tailings, prospectivity and upside potential.
The concessions are located on the same suture zone as the Hassai gold mine, which is the largest gold producer in Sudan, with historic production of some 100,000 ounces per year.
The concession areas are sparsely populated and arid, with rugged topography in places, varying between 100 metres and 1,750 metres above sea level. There has been 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.
Pan African’s 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 budgeted expenditure allocated for the first financial year is estimated at US$2.5 million.
“Our management team has been visiting Sudan for the last two years to identify prospective gold mining sites,” said Cobus Loots, Pan African’s chief executive.
“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.”
Peel Hunt kept its buy rating and -28p target with the shares today down 1% at 21p.
-- adds broker target --