Pan African acquires Tennant Consolidated Mining Group in Australia

All scrip acquisition of 92% of Tennant Consolidated Mining Group Pty Ltd (TCMG) by Pan African via a Share Acquisition Agreement: Pan African acquired an initial 8% of TCMG in March 2024 and following the Transaction, TCMG will be a wholly owned subsidiary. Consideration represents a total acquisition cost of US$54.2 million. Initial cash investment of US$3.4m during March 2024 is for an 8% shareholding in TCMG.

STRATEGIC RATIONALE

• Complementary to Pan African’s current portfolio of high-margin, long-life surface re-mining operations
• Opportunity to acquire near term, low-cost and low risk production growth from a Tier 1 mining jurisdiction (Australia’s Northern Territory)
• Processing facility will be the largest to ever operate in the region, providing economies of scale
• Near-term production growth at TCMG’s Nobles Gold Project, scheduled to commission in the second quarter of the 2025 calendar year with a target initial 8-year life-of-mine (LOM), inclusive of 5 years in current Mineral Reserves. Additional three years of production currently in the permitting process
• Access to an attractive asset portfolio in one of Australia’s known highest grade mineral fields.
• Region under-explored, with less than 8% of holes drilled below 150m depth
• Significant land position, as TCMG controls 1,700km2 through 100% owned assets as well as through the Emmerson Resources Limited (ASX: ERM) Joint Venture (ERM-JV), utilising a hub & spoke growth strategy to process multiple deposits
• Experienced corporate and project execution team in place to ensure successful project delivery
• Potential to significantly expand the Mineral Resource and Mineral Reserve base as well as the LOM beyond 15 years through two-staged gold and copper strategy, underpinned by an exploration target with up to an additional 800koz of gold alone
• Represents an increase in Group production by approximately 20% per annum in the next year

BACKGROUND OF THE TENNANT CREEK GOLD FIELD

Tennant Creek is a town located in the Northern Territory of Australia. It is the seventh largest town in the Northern Territory, approximately 1,000 kilometres south of the capital Darwin, and 500 kilometres north of Alice Springs.

The Tennant Creek Gold Field (TCGF) was discovered in the early 1930s and was mined until the early 2000s when the gold price reached lows of A$500/oz, resulting in the termination of mining activities in this region. The TCGF was one of the highest-grade gold-producing fields in Australia, with production over the period yielding 156t of gold (5.5Moz), 348,000t of copper, 59.2t (1.9Moz) of silver, and 21,600t of Bismuth. Following 30 years of mining at the Nobles underground mine, the crown pillar collapsed in 1967 due to erosional degradation of the iron oxide lithologies. The broken material was excavated from the failure zone and stockpiled on the Crown Pillar Stockpile (‘CPS’), with some of this material being treated while the new plant was being constructed during 1967 and 1968. From this point, Nobles was mined as an open pit mine, with the remainder of the CPS never being treated. It was Australia’s largest open pit gold mine until 1985.

The mineral deposits in the TCGF are well studied and understood through historical mining as well as current exploration. These deposits form part of the hematite and magnetite end members of an Iron Oxide Copper Gold (IOCG) mineralisation style. The ore bodies tend to express as cone-like, blanket-like breccia sheets within granitic margins, or as long ribbon-like breccia or massive iron oxide deposits within faults or shear zones. Continuity of these deposits is proven with strike lengths more than 50m, widths of 2m-24m or more and down-dip extents of hundreds of meters. Typically, these deposits are enriched in copper, gold, cobalt, silver, uranium and bismuth.