Pan African Resources, a South Africa-focused gold producer, has completed a definitive feasibility study for its Soweto Tailings Retreatment (STR) project, paving the way for a potential R3.68 billion ($216 million) investment to expand gold production at its Mogale Tailings Retreatment complex on the West Rand of Gauteng.

The project, known as STR, involves the retreatment of tailings storage facilities acquired through Pan African’s Mintails transaction. The company said the project contains approximately 108 million tonnes of Mineral Reserves grading 0.28 grams per tonne, equivalent to approximately 0.98 million ounces of gold.

Soweto tailings project targets 561,000 ounces of gold

The DFS evaluated the construction of a 600,000-tonne-per-month tailings retreatment operation adjacent to Pan African resources’ existing Mogale Tailings Retreatment facility.

The project is expected to produce between 35,000 and 40,000 ounces of gold annually, with total life-of-mine production estimated at approximately 561,000 ounces over a project life of roughly 15 years.

Pan African Resources estimates life-of-mine all-in sustaining costs at approximately $1,750 to $1,800 per ounce, excluding potential savings from renewable energy supply.

At a gold price assumption of $3,550 per ounce, the project is expected to generate a post-tax NPV13 of approximately R1.85 billion ($109 million), with a real ungeared internal rate of return of approximately 29.55%. The project is expected to have a payback period of approximately three years after commissioning.

Value engineering cuts project capital by R718 million

Construction is expected to take approximately 28 months from the date of the FID. Pan African Resources reduced the estimated capital requirement for the STR project by approximately R718 million following a comprehensive value-engineering exercise.

The review reduced the original project capital estimate of approximately R4.40 billion to R3.68 billion while maintaining the planned throughput, production profile and operational performance.

The revised capital estimate includes a dedicated new tailings storage facility and associated remining infrastructure. The project will also benefit from existing infrastructure at the MTR complex, including elution, carbon regeneration, electrowinning and gold-smelting facilities, reducing the capital intensity of developing the operation as a standalone project.

Project expected to lift Mogale production

The STR project will include a dedicated 600,000-tonne-per-month tailings retreatment circuit, hydraulic mining infrastructure, pumping stations and approximately 18 kilometres of overland slurry and water pipelines. It will also include process-water infrastructure and a new modern tailings deposition facility designed to comply with the Global Industry Standard on Tailings Management.

Chief Executive Officer of Pan African Resources Cobus Loots said the completion of the DFS represents an important milestone in the development of the Mogale Tailings Retreatment complex.

He said the project’s ability to leverage existing infrastructure has enabled Pan African to define a development with attractive returns, additional gold production and accelerated environmental rehabilitation.

“The STR project has the potential to increase annual gold production from the MTR complex to approximately 100,000 ounces per annum at peak production,” Loots said, while noting that the project would simultaneously address historical environmental liabilities on the West Rand.

Once operational, the project is expected to work alongside the existing MTR operation and increase gold production from the broader Mogale complex to approximately 100,000 ounces annually at peak production. The development is also expected to accelerate the rehabilitation of historical tailings facilities and surrounding areas on the West Rand.

Pan African advances environmental approvals

The environmental impact assessment and permitting process for the project is well advanced, with approvals already secured for pipeline servitudes.

Pan African has also submitted its Water Use Licence application, which remains in progress.

The company expects to receive the principal environmental authorisations during its 2027 financial year, supporting its targeted development timetable.

The remaining permitting, optimisation and financing workstreams are expected to be completed during FY2027.

Final investment decision targeted for December 2026

Pan African Resources expects to make a Final Investment Decision on the STR project in December 2026, subject to board approval, project financing and receipt of the required statutory authorisations.

Pan African Resources’ STR development forms part of its broader strategy of extracting additional value from historical tailings assets while expanding production through infrastructure-led projects.

With approximately 0.98 million ounces of gold contained in its defined Mineral Reserves, a projected 561,000 ounces of life-of-mine production and a targeted 29.55% internal rate of return at the stated gold-price assumption, the project represents a significant potential growth avenue for the South African gold producer.