19 February 2010
Pan African Resources PLC
(`Pan African' or the `Company')
(Incorporated and registered in England and Wales under Companies Act 1985 with
registered number 3937466 on 25 February 2000)
Share code on AIM: PAF
Share code on JSE: PAN
ISIN: GB0004300496
Pan African enters into exclusivity agreement and agrees to terms for the
establishment of the Phoenix Plant site and withdrawal of cautionary
announcement
Pan African is pleased to announce the conclusion of an interim Exclusivity and
Agreed Terms Agreement (the `Agreement') between itself, its wholly-owned
subsidiary Phoenix Platinum Mining (Pty) Ltd (`Phoenix') and International
Ferro Metals SA (Pty) Ltd (`IFM') (collectively the `Parties'). The Agreement
relates to the siting and construction of the Phoenix Chrome Tailings
Retreatment Plant (`CTRP') on the IFM Mine Property ("IFM Property") as well as
the potential acquisition of the 25% Net Profit Interest ("NPI") held by IFM in
respect of the Platinum Group Metals contained in the IFM Lesedi operations
tailings fraction treated through the CTRP. The effective date of the Agreement
was 18 February 2010.
The Agreement allows the Parties to negotiate exclusively for a 12 month period
("Exclusivity Period") to finalise the exact CTRP site location on the IFM
Property, and also to resolve technical issues relating to the required
services and associated facilities and utilities. The Exclusivity Period may be
extended by a further six months by mutual agreement. The Agreement also
stipulates the terms under which Phoenix may acquire IFM's 25% NPI and fixes
the total consideration for the CTRP site location and acquisition of the NPI
at ZAR80 million (approximately £6.8 million), payable in cash. A
non-refundable exclusivity fee of ZAR2 million cash (approximately £170,000)
was paid by Phoenix to IFM on the effective date.
Jan Nelson, Chief Executive Officer of Pan African, commented: "The signature
of this agreement marks a significant milestone in advancing our Phoenix
project to production. Final plant design engineering work is expected to be
completed within four months after the conclusion of a formal CTRP and NPI
agreement, whereupon the CTRP construction will commence. We expect that the
CTRP should be commissioned within 12 months from commencement of earthworks,
which means that H1 of 2012 is a realistic production start-up date."
Withdrawal of cautionary announcement
Shareholders are referred to the cautionary announcement first released on 26
November 2010 and subsequently renewed on 7 January 2010 and 10 February 2010,
and in terms of the listings requirements of JSE Limited are advised that, as
the possible transaction referred to therein has now been announced, caution is
no longer required to be exercised when dealing in the Company's securities.
ENDS
For further information on Pan African Resources and a presentation providing
more detail on the Phoenix acquisition, please visit the website at
www.panafricanresources.com
Enquiries:
Pan African Resources
Jan Nelson, Chief Executive Officer
+27 (0) 11 243 2900
Nicole Spruijt, Public Relations
+27 (0) 11 243 2900
RBC Capital Markets
Martin Eales
+44 (0) 20 7029 7881
Macquarie First South (Pty) Ltd
Melanie de Nysschen / Thembeka Mgoduso
+27 (0) 11 583 2000
St James's Corporate Services Limited
Phil Dexter
+44 (0) 20 7499 3916
Werksmans Incorporating Jan S. de Villiers
Huneiza Goolam
+27 (0) 11 535 8000