JOHANNESBURG (Business Day) -- Gold miner and explorer Pan African Resources' [AIM:PAF] share price surged 50% in early trade on London's AIM yesterday when its six-month suspension was lifted after finalising its merger with Metorex's Barberton Mines.
The stock, suspended at 6 pence in December, traded up to 9.13 pence.
Metorex will hold a 55% stake in the new company after merging its 74% interest in Barberton Mines with Pan African's suite of exploration projects in Mozambique, Central African Republic and Ghana. If its shareholders approve the deal at a July 27 meeting Pan African will take a secondary listing on the JSE's AltX on July 31.
Pan African CEO Jan Nelson said yesterday the company aimed to become within the next five years a 500,000-ounce-a-year gold producer and have defined a gold resource of 10 million ounces.
Barberton Mines was producing about 100,000 ounces of gold a year, and planned to increase this to 150,000 ounces through exploration and acquisitions.
A $2 million exploration programme would be conducted over the current lease area at Barberton Mines, and management also believed there could be opportunities for consolidation among gold mines in the Barberton area.
Metorex owned the Biox bacterial treatment plant extracting gold from typical Barberton deposits, the only one in the area.
Nelson said management would consider buying operating mines only where it made economic sense, and no moves to make acquisitions in the area had been taken yet.
Another 100,000 ounces of gold a year could potentially be produced from Pan African's Manica project in Mozambique, now the subject of a prefeasibility study. Nelson said the rest of the targeted production could be delivered by the company's Bogoin and Dekoa exploration projects in the Central African Republic and its recently acquired Akrokerri property in Ghana, together with acquisitions.
Nelson said there were no plans to raise capital at present for current projects because Barberton Mines was generating cash flow that would finance the company's exploration activities. But if Pan African made acquisitions it might have to return to the markets for finance, depending on how the deal was structured.
