By Allan Seccombe
Business Day (South Africa)
Pan African Resources has cleared one of the final financial hurdles to complete the R1.5bn purchase of Harmony Gold’s Evander mine, which will double the junior miner’s gold output. The acquisition will also give it a suite of projects that it can either develop itself or share with other parties, potentially including Chinese investors.
Pan African shareholders on Friday overwhelmingly supported a R703m rights issue at R1.90 per share that the JSE-and London-listed gold and platinum producer needs to pay Harmony for the mine. The mine will add 100,000oz of gold to the company a year, adding to the 95,000oz of gold coming from its Barberton mine. The shares closed on Monday at R2.99.
There is cash of R268m in Evander, which has been accruing for Pan African since April this year, as well as R319m within Pan African itself. It is also finalising a R600m revolving credit facility with two South African banks in coming weeks, which gives it more than enough firepower to pay Harmony, Pan African CEO Jan Nelson said in an interview on Monday.