Pan African puts Soweto tailings project at R3.68bn and targets a December investment decision

Pan African Resources has finished the definitive feasibility study (DFS) for its Soweto tailings retreatment project on the West Rand, putting the capital bill at R3.68bn and setting December 2026 as the target for a final investment decision. The study, released on 11 September, lays out how the group could lift output from its wider Mogale complex to about 100,000oz of gold a year at peak.

The project would reprocess the Soweto Cluster tailings storage facilities, which Pan African picked up in its October 2022 acquisition of Mintails. Reserves stand at roughly 108 million tonnes grading 0.28g/t, and the study expects 35,000oz to 40,000oz of gold a year over a life of about 15 years, or some 561,000oz in total.

Cheaper than first feared, dearer than first planned

The plan is for a 600,000 tonne-a-month retreatment circuit built next to the existing Mogale Tailings Retreatment (MTR) plant. The new circuit would share MTR's elution, carbon regeneration, electrowinning and smelting facilities, which is how Pan African intends to keep capital intensity down.

A value engineering exercise trimmed about R718m from an earlier R4.40bn estimate. Even so, the final R3.68bn figure is roughly R880m above the R2.8bn outlined when the company first scoped the expansion in November 2025, a difference TimesLIVE attributed mainly to a new tailings storage facility and associated infrastructure now included in the scope.

At an assumed gold price of $3,550/oz the project carries a post-tax net present value of about R1.85bn ($109m) and an internal rate of return of 29.55%, with payback roughly three years after commissioning. All-in sustaining costs are estimated at $1,750/oz to $1,800/oz over the life of mine, before any benefit from renewable power supply. The gold price assumption sits well below current spot levels, which gives the numbers some headroom.

Permits are the critical path

The decision in December depends on board approval, project funding and statutory authorisations. Pan African says the environmental impact assessment and permitting process is well advanced and that its water use licence application has been lodged and is being processed. It expects the principal environmental authorisations during its 2027 financial year. Construction is expected to take about 28 months after the investment decision, which points to first gold from the new circuit around 2029 if the timetable holds.

Chief executive Cobus Loots told Proactive the study defines a project with “attractive returns, meaningful production growth and accelerated environmental rehabilitation”. He added that reprocessing the old facilities would speed up the rehabilitation of the surrounding land, addressing historical environmental liabilities on the West Rand.

Why it matters

Tailings retreatment has become the lowest-risk way to add gold ounces in South Africa. It avoids the depth, seismicity and labour intensity of conventional underground mining while cleaning up legacy liabilities. MTR, which marked its first year of operation in 2025, already gives Pan African a template, and the Soweto project would roughly double the output of that complex. The investment decision will also test how quickly regulators can process water and environmental approvals for surface projects – a recurring bottleneck for tailings operators around Johannesburg. Shares fell 1.8% in London and 2.4% in Johannesburg on the day the study was published, according to Alliance News.

Sources

• Proactive Investors: Pan African maps route to 100,000 ounces a year at Mogale with Soweto tailings study, 11 Sept 2026
• TimesLIVE: Pan African completes feasibility study for Soweto gold project, 11 Sept 2026
• London South East (Alliance News): Pan African pegs Soweto project investment at nearly ZAR4 billion, 11 Sept 2026

Photo: Gold mine tailings on the Witwatersrand, South Africa. NJR ZA, Wikimedia Commons, CC BY-SA 3.0.