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JSE-listed Pan African Resources has secured financing of R703 million for the acquisition of Harmony Gold’s Evander Gold Mine. The funds were raised through a share offer of 25.5 new shares for every 100 shares held.

The purchase price for Evander has been set at R1.5 billion with the company already being financially sound for the acquisition. Pan African intends on completing the acquisition of Evander later this year.

Pan African was pleased with Evander’s results last year as current owner, Harmony highlighted its performance in last year’s results.

Evander operations reported an 18% increase in gold production and a 14% improvement in cash operating costs at R259 613/kg, which resulted in an operating profit of R141 million. Gold production for the quarter increased to 817 kg, due to a net increase of 8% in tonnes milled at 159 000 t as well as an increased grade to 5.14 g/t.

Pan African is in the process of completing its agreement with Eskom for its electricity supply, which has to be completed by 30 June 2013.

Investment research firm Edison forecasts that “the updated absolute valuation of Pan African, based on a maximum potential dividend flow discounted at 10% per annum, has increased by 43.6%, from 20.77pence(R2.92) per share to 29.83 pence per share currently”.

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