Why Africa?

Two-thirds of the African continent is geologically prospective. Despite limited exploration, Africa hosts about 30% of the world’s mineral reserves including 40% of global gold and PGM reserves.

In the post-World War II political environment, when African countries were being freed from colonial rule, almost all of these governments adopted state control and ownership of mineral resources, heavy taxation and regulations. Many of these countries, such as Ghana, Zimbabwe and The Democratic Republic of Congo, that had viable mining industries as European colonies, saw mining production and exploration start a long decline that lasted for 30 years till the early 1980s.

Prior to 1985 the legal, political, ownership, regulatory and taxation regimes discouraged international and junior mining companies from the African continent. In 1986, Ghana was the first independent post-colonial government to reform its mining regulations to provide a viable tax and regulatory framework that allowed for foreign ownership. By 1995, 35 African countries had followed suit by redefining rights and obligations for investors, increasing incentives, deregulation and privatisation.

The reduction in political and economic risk has attracted juniors and seniors to explore in these countries. The latter group has in turn been rewarded with some world-class discoveries in recent years, many of them initially found by juniors.

Over the past five or six years, all of sub-Sahara Africa has seen dramatic changes in mineral exploration in both dollar terms and areas under exploration. To date, 60% of all mineral exploration in Sub-Saharan Africa has gone to gold and diamond exploration. Historically Canada, Australia, and the USA received close to 70& of all mineral exploration funding. From 1981 to 1991, Canada was number one in this category. In 1994, Australia took over the lead to be replaced by Latin America in 1997. During this period, Africa moved from 7th to 3rd place in exploration funding. Africa is now equal to Australia and ahead of Canada and the US in the dollar value of exploration funding and activity.

In 1990, Africa attracted less than 5 per cent. of world exploration funding. Since then, it has increased 9 times to represent 17 per cent. of the world total. Although the African continent has received huge interest in exploration activity to date, there is still opportunity to discover and explore areas, which can deliver significant shareholder value.

For example the CAR remains wide open as there are currently only two gold companies actively exploring for gold. Pan African is one of them and, with its exploration focus in this favourable area of the African continent, the Company believes it will be able to unlock significant future mineral potential.

Mozambique is another point in case where Pan African is looking to unlock significant mineral potential if the Manica project is developed as an open-pit mine. Should this occur it will become the county’s first commercial gold mine, in addition to considerable future exploration activity in the area.

Pan African has initiated a US$ 2,000,000 exploration programme at Barberton Mines over two years to grow current mine production and extend LoM. Should this exploration programme be successful and current mine production levels are maintained, the Company will be a significant creator of employment in the region.


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