Pamodzi Gold acquires South African mine

London-listed gold-mining company Thistle Mining has announced its plans to accept a bid from Pamodzi Gold for its South African gold mine President Steyn.

Thistle's board agreed to the nonbinding proposal for the sale offered by Pamodzi, in a deal which will cost the purchasing company 300 million South African Rand ($41 million).

President Steyn gold mine is located in the Free State region and represents a chance for South African mining company Pamodzi to considerably expand its gold production, with proven and probable reserves at the acquired mine estimated to total approximately 1.9 million ounces.

Expansion does not, however, stop there for Pamodzi. The company has also confirmed a formal agreement to purchase Harmony's Orkney mines, stating its aim to become a one million ounces per annum gold producer in the near future.

"Pamodzi Gold is in a good position to secure capital to develop President Steyn's Golden Triangle project and to further explore the Eldorado Reefs," the company told the Johannesburg Stock Exchange.

For Thistle the deal comes after setbacks at the mine in July, where a fire and seismic activity combined to lower Thistle's expected output for the year from 137,200 to 134,400 ounces of gold.