Pan African Resources has completed its acquisition of Tennant Consolidated Mining Group (TCMG). They have secured the remaining 92% stake through a share agreement.
This brings TCMG under Pan African’s full ownership as a wholly-owned subsidiary. The deal, announced on November 5, marks a significant expansion for Pan African into Australia.
The acquisition cost totals $54.2 million. Pan African initially invested $3.4 million in March to acquire an 8% stake in TCMG. The remaining shares were purchased with $50.8 million in newly issued Pan African shares. This represents less than 6% of its issued share capital.
The investment aims to add low-cost production from a Tier 1 jurisdiction, with a targeted payback period of three years. This is based on an average gold price of $2,600 per ounce.
Pan African’s financial projections align with the company’s annual target of around 20% return. CEO Cobus Loots stated, “Pan African has, in past years, successfully executed on our strategy of producing gold safely from low-cost operations and diversifying our portfolio to include both low-risk and low-cost surface and underground operations.
TCMG represents an opportunity to further expand and diversify our near-term low-cost production base and the next phase in the growth trajectory of the group, in a Tier 1 mining jurisdiction.”
Expanding Production in Australia’s Northern Territory
TCMG’s portfolio covers 1,700 km² in Australia’s Northern Territory, including high-potential assets like Warrego, Nobles, and Juno.
Pan African has spent the past year evaluating these holdings. The region’s resources include approximately eight million ounces of gold and 1.2 million tonnes of copper, with exploration largely untapped below 150 meters.
A completed feasibility study, compliant with Australian and South African standards, reports 1.3 million ounces in gold resources and 400,000 ounces in reserves.
Projected financials forecast a $420-million free cash flow over the life of the mine at $2,600 per ounce, with a net present value of $129.7 million and a real ungeared internal rate of return of 144%.
Initial capital costs are fully funded, including Australian debt facilities and support from the Northern Territory government. Construction on the processing plant is more than halfway complete, with commissioning expected by June 2025, followed by the first gold pour the next month.
Over the first three years, TCMG aims to produce about 50,000 ounces of gold annually at an all-in sustaining cost of around $1,300 per ounce.
CEO Loots confirmed, “The group has been assessing the TCMG portfolio for almost a year. This acquisition complements our strategy of focusing on safe, low-cost gold mining opportunities.”
The Nobles project will launch in mid-2025, with an eight-year mine life supported by five years of reserves and three more pending permits. Once operational, the processing facility will be the largest in the region, benefiting from economies of scale.
Suspension of Exploration in Sudan
Pan African also has interests in Sudan but suspended exploration due to the country’s ongoing political unrest. The company issued a notice of force majeure to the Sudanese Mineral Resources Company to protect its exploration concessions in the region. “All of the group’s assets [in Sudan] will be safeguarded,” Pan African stated.
This acquisition reinforces Pan African’s commitment to expanding its portfolio with high-margin, long-life projects in stable jurisdictions.