Pan African Resources has agreed to buy Evander Gold Mines from Harmony Gold for R1.5 billion.
Evander, currently a wholly owned subsidiary of Harmony, mines and produces gold and related products and is located in Mpumulanga, South Africa.
Evander has a total underground resource of 32.5 million ounces and a reserve of 7.6 million ounces. Its operations include the Evander 8 shaft which has an expected life of mine of more than 10 years and is expected to produce approximately 100,000 ounces of gold per annum; various development projects comprising Evander South, Rolspruit and Poplar; surface resources comprising existing tailings dumps; metallurgical processing facilities known as the Kinross plant; and associated infrastructure and buildings.
Evander reported a net profit of R269 million for the six months ending 31 December 2011, with a net asset value of R1.2 billion as of 31 December 2011.
Commenting on the news, Jan Nelson, CEO of Pan African, said: "The transaction meets Pan African's strategic objective of acquiring a high grade, high margin, quality asset on the low end of the cost curve from which the company will achieve profitable, sustainable, stakeholder growth.
“In addition to acquiring an earnings accretive asset, the transaction will double Pan African's annual gold production, to approximately 200,000 ounces per year, and increases the company's resources and reserves significantly."
Pan African said it may dispose of certain of Evander’s assets that it does not view as being core to its operations.
Headquartered in Johannesburg, South Africa, Pan African Resources operates in both South Africa and Mozambique.
