Pan African CEO on Tennant Creek consolidation deal - ICYMI Proactive uses images sourced from Shutterstock

Earlier this week, Pan African Resources PLC (LSE:PAF, OTCQX:PAFRY, JSE:PAN) CEO Cobus Loots talked to Proactive about the company’s decision to acquire Emmerson Resources.

Loots explained the thinking behind the move to full ownership of the Tennant Creek gold project in Australia, where exploration success has already highlighted the potential of the area.

Loots also discussed exploration opportunities at Tennant Creek, and key milestones investors should watch as the deal progresses.

Proactive: Cobus, very good to speak with you. Pan African already owns 75% of the Tennant Creek joint venture. Why was now the right time to acquire Emmerson outright?

Cobus Loots: Well, it makes sense to consolidate all of Tennant into one entity. We believe that eliminates the complexities of the joint venture agreement and frees up Pan African to fast-track the development of this field as we see fit. Since we acquired Tennant, Emmerson and Tennant have had excellent exploration success, specifically at the White Devil deposit, which has turned out to be more than half a million ounces at very attractive grades.

Proactive: What strategic advantage does full ownership of Tennant Creek bring in terms of project development, capital allocation and long-term value?

Loots: We now have about 1,700 square kilometres of very prospective ground. In addition to White Devil, our geophysics has identified at least ten similar anomalies. We're very excited about the exploration potential, and owning the entire project means we can fast-track exploration. It also provides exposure to existing resources and reserves, and eliminates certain penalty and royalty payments that were due to Emmerson.

Proactive: How does Emmerson fit alongside Pan African’s existing operations and what does it add to the broader portfolio?

Loots: Effectively, we are buying more of what we already own through the joint venture. It's not a business that we don't understand or know well.

Proactive: The deal also includes a planned ASX listing. How important is that for strengthening your presence in Australia?

Loots: It was very important for Emmerson shareholders because they wanted to retain exposure to the larger group and its prospects. We believe an Australian listing would be well received. During the past year we conducted a roadshow in Australia and met several major institutions. Pan African compares well with the gold mining opportunities available in the Australian market.

Proactive: It's also a good time to increase exposure to gold with prices strong.

Story Continues

Loots: Yes, very much so. These are assets we already know and own, and those are often the best deals.

Proactive: What milestones should investors look out for before completion?

Loots: The transaction will be structured as a scheme of arrangement. Documentation will be circulated to Emmerson shareholders and there will be a vote later this year. Work on the deposits will continue in the meantime.

Proactive: Cobus, thank you very much for speaking with us today.

View Comments