Pan African Resources is focusing on finding and developing fresh gold resources at its Barberton operations in an area that has been mined for 130 years but still has attractive prospects.

Having scoured Africa, in particular West Africa, for growth opportunities, Pan African has realised it has better deposits on its mining tenement in Mpumalanga and is pushing hard at its Royal Sheba prospect to bring an open-cast mine into production, CEO Cobus Loots said on Thursday.

Acknowledging that investor appetite for deep-level, labour-intensive mining in SA has all but evaporated, Loots outlined Pan African’s strategy to develop low-cost, safe, mechanised operations, such as its recently commissioned R1.74bn Elikhulu tailings retreatment plant at Evander and the potential Royal Sheba mine at Barberton.

Pan African, which is listed in London and Johannesburg, shut its Evander underground mine, shedding 1,700 jobs, after monthly losses of R30m.

Delivering the Elikhulu project to steady-state production during September after it poured its first gold in August was a pressing task, but the exploration results from Royal Sheba had put the development of a mine at the top of the team’s agenda, Loots said.

It is unlikely that the mine, which will be an open-cast operation with grades above 3.8g/t and a processing plant, will cost more than the Elikhulu project, which entailed building a plant with a capacity of 12-million tons a year.

Starting a new mine in SA is fraught with difficulties, with a number of projects stalled by environmentalists and communities, particularly those in or near nature reserves.

Loots said Pan African is working hard to include nearby communities in the exploration work at Royal Sheba, which was once a small underground mine, and he stressed the point that 500 jobs would be created if a mine was built.

The drilling at Royal Sheba, which is 80% complete, has shown a near-surface resource of 350,000oz, which at production of 50,000oz a year would deliver a seven-year mine, but there is further drilling to be done to extend the understanding of the ore body, said Loots.

He described the geologists working on Royal Sheba and the nearby Consort tenement as having "gold fever" as they advance their exploration work in an area described as "full of gold".

Royal Sheba’s ore does not need special treatment like the refractory ore from Pan African’s other Barberton shafts, which requires special bacteria to release the gold locked in sulphides, in a process called Biox.