It said the updates estimate was 900,000 ounces of gold from 8.56 million tonnes at 3.27g/t Au.

The continuing exploration drilling programme determined a near-surface resource of 350,000oz from 2.84Mt at 3.81g/t Au, which was conducive to openpit mining, while the underground resource was delineated at 550,000oz from 5.72Mt at 3g/t Au.

Pan African CEO Cobus Loots said the exploration results had exceeded expectations and reaffirmed the grades historically mined at depth.

"Significantly, the drilling programme has indicated the orebody extends to surface, with the potential to establish a new open pit mining operation in the short-term, transitioning to an underground mining operation only after a number of years," he said.

The first and second phase of surface drilling at the project comprising 1,645m also confirmed robust mineralisation extending from the surface along 850m strike and 150m down dip of the Royal Sheba deposit.

Pan African has started the third phase of drilling to test a further 600m strike length and would soon finalise a definitive feasibility study for February 2019, with the aim of starting project development in the near-term, according to Loots.

The company has also started an extended exploration programme within Barberton's mining right at Sheba and New Consort Mines around historic workings for potential new satellite deposits.

"Royal Sheba's opencast orebody has the potential to increase production from our flagship Barberton operations at a very competitive cost, aligned with our strategic positioning as a low cost gold producer," Loots said.

Meanwhile, Pan African also successfully concluded a three-year wage agreement with the National Union of Mineworkers (NUM) and the United Association of South Africa (UASA), which represent the majority of employees at Barberton Mines.

It said the agreement provided for an average annual wage increase of around 6.5% and 5.5% for NUM and UASA members, respectively, over the three-year period. 

Pan African's shares edged up 1.52% to 7.66p (US9.9c) after the updated resource was released.